The number of homeowner mortgaged properties repossessed rose by 3% in the first quarter of 2026 compared with the previous three months, according to UK Finance.
A total of 1,250 homeowner properties were repossessed during the quarter, up 2% on the corresponding period last year.
UK Finance said repossession levels remain well below long-term historical averages and noted that borrowers experiencing difficulty are encouraged to contact their lender early to discuss available options.
In the buy-to-let sector, 810 mortgaged properties were repossessed in Q1 2026, up 5% on the previous quarter and unchanged year-on-year.
Arrears levels remain low overall. At the end of the quarter, 0.91% of homeowner mortgages and 0.47% of buy-to-let mortgages were in arrears.
The number of homeowner mortgages in arrears of 2.5% or more of the outstanding balance stood at 79,110, down 2% on the previous quarter and 12% lower than a year earlier. Buy-to-let arrears of the same severity totalled 8,960, down 6% quarter-on-quarter and 24% year-on-year.
UK Finance noted that arrears volumes are significantly lower than during the global financial crisis, when homeowner and buy-to-let arrears peaked at 216,400 in Q2 2009.
It said most repossessions currently involve older mortgage agreements, with more than two-thirds linked to loans taken out at least 10 years ago.
The organisation added that repossession is generally used as a last step after other forbearance options have been exhausted. It also noted that higher interest rates and broader economic uncertainty continue to affect affordability for some borrowers, although recent mortgage pricing has stabilised in parts of the market.
James Tatch, head of analytics at UK Finance, said: “The number of mortgages in arrears continues to fall for both residential and buy-to-let mortgages. While possessions are up very slightly on the previous quarter, they remain low by historic standards.
“Lenders stand ready to support customers who may be worried about meeting their repayments. We would always recommend customers contact their lender as soon as possible to discuss the tailored help available.”
Mary-Lou Press, NAEA Propertymark president, commented: “While it is positive news to hear mortgage arrears sit lower during the first quarter of this year than they did within the quarter directly previous, it is, however, important to acknowledge future affordability constraints, especially concerning current global unrest.
“The current rate of inflation remains a key concern, and the impact this may have on the base rate remains to fully play out yet.
“Should homeowners find themselves in a position where they are worried about repayments, they should proactively speak with their lender at the very first opportunity, as they have a duty to help where possible and will also be keen to do so.”
David Miller, divisional director at Spicerhaart Corporate Sales, added: “The good work of lenders is on show once again as we see arrears cases fall across all bands in Q1. While this is clearly great news, we do have to address the elephant in the room. The landscape is changing rapidly with the ongoing Iran conflict derailing the future path of interest rates and inflation.
“In recent months, we have seen the number of instructions coming to us has increased – particularly for support with assisted voluntary sales. With no signs of an end to this conflict and inflation likely to climb further, lenders must keep that laser focus on forbearance, arrears management and proactive intervention and support.
“We were pleased to see leasehold reform outlined in the King’s Speech this week and it can’t come soon enough – especially as leasehold properties now make up 54% of the properties we manage for clients. Leasehold remains a primary driver behind why properties are coming into possession – whether it’s surging service charges, doubling ground rent or increasing difficulties with management companies. This is eroding demand and interest, as well as significantly affecting resale values. It’s an area where urgent action from the Government is needed, not further delays caused by yet another prime minister merry-go-round.
“Given the current complexities, we are seeing more lenders looking to outsource to trusted partners with real expertise in asset management – helping them to understand the value and any potential risk within their mortgage book, act early and ensure good outcomes for borrowers. On the ground, it is great to see lenders continue to work proactively and in the best interests of their customers.”
Read the orginal article: https://propertyindustryeye.com/home-repossessions-edge-higher-but-remain-below-long-term-averages/?utm_source=rss&utm_medium=rss&utm_campaign=home-repossessions-edge-higher-but-remain-below-long-term-averages
