UK Finance has released its latest mortgage arrears and possession figures for the final quarter of 2024, revealing a decline in arrears among both homeowners and buy-to-let (BTL) landlords. While repossessions have increased slightly, they remain well below historical levels. Lenders continue to provide tailored support for borrowers, ensuring that those facing financial difficulties have options to manage their payments.
Arrears falling, market showing resilience
The data highlights a positive trend, with the number of homeowner mortgages in arrears falling by 2% compared to Q3 2024, standing at 92,170 cases. The BTL sector also saw improvement, with arrears down by 3% to 12,610. These figures indicate that landlords, like homeowners, are navigating economic pressures more effectively than anticipated.
Crucially, the proportion of mortgages in arrears remains low—just 1.06% for homeowners and 0.65% for landlords. To put this in perspective, at the peak of the global financial crisis in Q1 2009, mortgage arrears stood at a staggering 209,600 cases, more than double today’s figures.
Mortgage lenders have reassured borrowers that support remains available for those in difficulty. Charles Roe, Director of Mortgages at UK Finance, acknowledged the improvement: “The number of mortgages in arrears has seen a slight decrease compared to the previous quarter. Having peaked in Q1 2023, arrears appear to now be on a confirmed downward trend.” He added that while financial pressures persist, the easing of high interest rates and cost-of-living challenges has helped borrowers regain stability.
Repossessions remain low despite increase
While arrears are declining, the number of properties taken into possession rose slightly in Q4 2024. A total of 1,730 mortgaged properties—both homeowner and BTL—were repossessed, reflecting a cautious increase. However, this remains 87% lower than the 13,200 recorded in Q1 2009 and 13% lower than pre-pandemic levels in Q4 2019.
Lenders emphasise that repossession is always a last resort, only pursued after all other options have been exhausted. Financial institutions are keen to keep tenants and landlords in their properties wherever possible.
Lenders continue to back borrowers
One of the key factors preventing a major crisis in the mortgage sector has been lender affordability stress tests, which ensure borrowers can manage payments even if interest rates rise. This approach has helped landlords maintain stability in their portfolios.
However, UK Finance stresses that external pressures—such as unexpected financial difficulties—can still impact mortgage payments. Borrowers struggling to meet their obligations are urged to contact their lenders at the earliest opportunity. Importantly, reaching out for support will not affect a borrower’s credit score.
Roe reinforced this message, stating: “This is good news for customers, but we know that this will not be the case across all households, and lenders will support anyone who might be struggling. If you’re worried about your finances, please reach out to your lender as soon as possible to discuss the help available.”
What does this mean for landlords?
The latest data offers reassurance for landlords concerned about mortgage arrears. With BTL arrears declining and repossessions still historically low, the market is proving more resilient than some analysts predicted. While financial pressures remain, particularly for landlords facing refinancing at higher rates, lenders appear willing to work with investors to find solutions.
For landlords, the key takeaway is clear: early communication with lenders is essential if difficulties arise. With mortgage arrears falling and tailored support on offer, the outlook for property investors is increasingly stable.
