Buy-to-let mortgage arrears fell to 8,960 in the first quarter of 2026, down 6 percent on the previous quarter and 24 percent lower than a year earlier, according to UK Finance data published on 14 May.
The trade body’s figures also showed that 0.47 percent of buy-to-let mortgages were in arrears of 2.5 percent or more of the outstanding balance in Q1. That leaves landlord arrears below homeowner levels, which stood at 0.91 percent, even as possession activity moved slightly higher.
Buy-to-let arrears eased but possessions rose
UK Finance said just over 800 buy-to-let mortgaged properties were taken into possession in Q1, 5 percent more than in the previous quarter and flat on the year. The body said the possessions now coming through are mainly linked to much older loans, with more than two-thirds tied to mortgages arranged at least a decade ago.
James Tatch, head of analytics at UK Finance, said the number of mortgages in arrears continued to fall for both residential and buy-to-let borrowing, while possessions remained low by historic standards. He said lenders were ready to support borrowers worried about repayments and urged them to seek help early.
For landlords, the split matters. Falling arrears point to a sector that is still coping with higher borrowing costs better than many feared. But the rise in possessions shows stress has not disappeared. Older loans, landlords rolling off long fixes and owners with weaker cash buffers still face pressure even with Bank Rate unchanged in recent weeks.
That fits with Landlord Knowledge’s recent coverage of lenders cutting buy-to-let rates and restoring LTVs, which suggested funding conditions were improving at the margin rather than returning to the easy-money era. Lower arrears support that view, but they do not remove the refinancing risk for landlords coming off older deals in 2026.
Rental arrears and court delays still cloud the picture
This follows Landlord Knowledge’s report on rent arrears hitting £2,281 in the first quarter, which showed tenant payment pressures have not gone away. The latest mortgage figures suggest that pressure has not yet translated into a wider spike in landlord loan distress, but the margin for error remains narrow for heavily geared investors.
There is also a practical reason not to treat these figures as a green light. Landlords facing serious arrears or failed tenancies still have to deal with a slow possession system. Earlier this week, Landlord Knowledge reported that landlords are waiting 32.5 weeks on average for possession through the courts. That means even a relatively low arrears rate can carry a high operational cost once a case turns bad.
As Mortgage Solutions reported from the latest UK Finance arrears and possessions release, landlords can draw two broad conclusions. First, the market is holding up better than the gloomier forecasts made during the rate shock. Second, the weaker cases are taking longer and costing more to resolve, which makes cash flow discipline more important than headline averages suggest.
What this means for landlords
- If you’re refinancing in 2026: lower arrears figures should help support lender appetite, but stress testing and pricing still matter if your fixed deal is ending.
- Watch for: possession cases linked to older borrowing, especially where rent arrears and court delays combine to stretch cash flow.
- Bottom line: the buy-to-let loan book looks stable overall, but individual landlords still need enough margin to absorb one bad case.
Editor’s view
These figures are better than many landlords will have expected after two years of higher rates. But the real message is not comfort – it is selectivity. Strong portfolios are coping, while weaker cases are becoming slower and more expensive to unwind.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 15 May 2026
Sources: UK Finance
Related reading: Landlord mortgage choice broadens as lenders cut rates and restore LTVs
