UK Finance said there were 84,100 homeowner mortgages in arrears of 2.5% or more of the outstanding balance in Q3 2025, 4 per cent fewer than in the previous quarter.

Within that there were 28,940 homeowner mortgages in the lightest arrears band, representing between 2.5 and 5% of the outstanding balance. This was 3% fewer than in the previous quarter.

There were 10,420 buy-to-let (BTL) mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2025, 8% fewer than in the previous quarter.

Within the total, there were 3,750 BTL mortgages in the lightest arrears band, again making up between 2.5 and 5% of the outstanding balance. This was 9% fewer than in the previous quarter.

Mortgages in arrears accounted for 0.97% of all homeowner mortgages outstanding, and 0.54% of all BTL mortgages outstanding in the third quarter of 2025.

Repossessions for homeownership mortgaged properties did rise in Q3 2025, by 4% to 1,390. UK Finance said this was “significantly below the long-term average”.

There was a steep rise in BTL mortgaged home repossessions, with 900 taken over by lenders in the third quarter – a rise of 14% on the previous quarter.

The findings mirror those of Pepper Advantage, which also found that arrears fell in Q3, albeit by 0.3%.