Home repossessions are falling, and mostly on old mortgages

Fewer people are losing their homes. In the second quarter of 2026, 1,150 owner-occupied properties were repossessed, down 14 per cent on the same period a year earlier, according to figures from UK Finance. Repossessions of buy-to-let properties fell further, to 630, a 20 per cent annual drop. It is the first time possessions have fallen year on year since late 2023, and they remain well below their long-term average.

Arrears are easing too. Some 77,940 homeowner mortgages were behind on payments by 2.5 per cent or more of the balance, an 11 per cent fall over the year. Buy-to-let arrears at that level dropped even faster, down 26 per cent to 8,390. For a market that has spent three years absorbing higher interest rates, that is a genuine turn rather than a rounding error.

The part the headline skips

Here is the detail worth knowing. UK Finance says more than two-thirds of the repossessions now taking place relate to mortgages arranged at least a decade ago. In other words, the homes being lost are largely not those of the stretched recent buyer everyone worries about. They tend to be long-running cases where a lender has already worked through every other option.

"The number of mortgages in arrears are falling for both residential and buy-to-let mortgages, and possessions are also down year on year for the first time since late 2023," said James Tatch, head of analytics at UK Finance. His first piece of advice for anyone worried is blunt, and worth repeating: speak to your lender.

Why the numbers are improving

Two things are doing most of the work. Wages have caught up a little with prices, which eases the monthly squeeze. And lenders have kept showing forbearance, the industry's word for working with a borrower rather than reaching for repossession. Taking a home back is slow, expensive and a last resort, so most lenders would far rather rearrange a loan than lose one.

That matters because the options are real. A lender can grant a short payment holiday, switch you to interest only for a period, or extend the term so each monthly payment falls. None of these are free, and a longer term means more interest over the life of the loan, but they can carry a household through a rough patch without anyone losing a home.

What to do if you are the exception

If your own payments are getting tight, the single most useful thing is to act early, before you miss one. It is far easier for a lender to help while you are still up to date than after arrears have started to build.

It also helps to know your own figures before that call. Our mortgage calculator shows what your monthly payment becomes at a different rate or over a longer term, so you can see the effect of extending the term before you ask for it. And if you are in the happier position of having spare cash, our mortgage overpayment calculator shows how even small regular overpayments cut both the years and the interest, which is its own quiet insurance against a future squeeze.

The wider message is cautiously positive. As Ian Harris, president of NAEA Propertymark, put it, the fall is encouraging, but affordability is still a challenge for many, and early engagement is key. The households coming through best are the ones talking to their lender before a problem turns into a crisis, not after.

This is general information, not financial advice. Figures are from UK Finance and cover the second quarter of 2026. If you are struggling with mortgage payments, contact your lender early and consider free, impartial guidance from MoneyHelper.