Buy-to-let mortgage arrears fell 22 percent year on year to 8,170 in the third quarter of 2026, UK Finance said on 12 November, as total possessions dropped 20 percent from a year earlier to 1,840.
The trade body said homeowner mortgages in arrears fell for the tenth consecutive quarter to 76,080, down 10 percent on the year and 2 percent on the quarter. Buy-to-let arrears were down 3 percent on the quarter and made up 0.43 percent of all buy-to-let mortgages, compared with 0.87 percent for homeowner loans.
The timing gives landlords some breathing space after the Bank of England lifted base rate to 4 percent on 5 November and warned that further tightening could follow if energy costs feed through. With mortgage costs set to stay high into next year, a continued fall in serious arrears points to borrowers still keeping up despite pressure on household budgets.
Light arrears tick up but wider trend improves
UK Finance said the number of buy-to-let mortgages in the lightest arrears band rose modestly against the second quarter but remained 18 percent lower than a year earlier. Arrears in every other band fell for both homeowner and buy-to-let loans, leaving the vast majority of customers paying on time.
James Tatch, Head of Analytics at UK Finance, said borrowers were continuing to manage payments despite rising cost pressures. “With homeowner arrears falling for a tenth consecutive quarter, and possessions well below historic highs, the overall picture is one of a resilient mortgage market, with the vast majority of customers continuing to make their repayments on time,” he said.
Tatch said lenders remained committed to tailored support for customers in difficulty. “Mortgage lenders remain committed to supporting customers who are facing difficulties. Anyone worried about keeping up with their repayments should contact their lender as soon as possible to discuss what tailored support is available,” he said.
Possessions lower than last year despite quarterly rise
Total possessions rose from 1,780 to 1,840 on the quarter, a 3 percent increase, but were 20 percent down on the same period in 2025. That marked the second consecutive year-on-year fall, with numbers far below historic peaks.
Homeowner possessions were unchanged on the quarter and down 17 percent year on year, remaining at their lowest level since the fourth quarter of 2024. Buy-to-let possessions rose 10 percent on the quarter to 690 but were still 23 percent below a year earlier. The full UK Finance arrears and possessions update for Q3 2026 includes quarterly data tables by arrears band.
Arrears picture steadies after lending rebound
This follows Landlord Knowledge’s report on UK Finance data showing buy-to-let lending jumped 21 percent in the second quarter, as purchase and remortgage activity picked up. The latest arrears figures suggest that growth has not yet fed through into distress, even as tenant-level strain persists.
Separate Reposit research found 18 percent of tenancies were in arrears in the third quarter, the worst reading in three years on that measure. The contrast underlines a split between rent collection pressure and mortgage payment performance, with landlords absorbing some of the gap.
What this means for landlords
- If you have a fixed rate ending soon: falling industry arrears will not protect individual refinances priced off higher base rate expectations – speak to a broker early and test affordability at current stress rates.
- Watch for: the lightest arrears band ticking up on the quarter, plus buy-to-let possessions rising 10 percent since Q2 – early signs of strain worth tracking into Q4.
- Bottom line: mortgage performance remains solid by historic standards, but cash flow buffers matter more while rates stay elevated.
Editor’s view
Falling arrears alongside lower possessions is a better backdrop than many landlords feared going into winter. The test now is whether that resilience holds as higher borrowing costs work through refinances and rent collection stays uneven.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 13 November 2026
Sources: UK Finance
Related reading: UK Finance: buy-to-let lending jumps 21% in Q2
