Buy-to-let mortgage repossessions have risen by 11% year-on-year, in what analysts are calling a warning sign for landlords navigating a challenging housing market.
Finance specialist Rachel Springall of Moneyfacts described the trend as “worrying,” noting that many landlords are finding it increasingly difficult to maintain mortgage repayments.
“Over the years landlords have been facing hits from all sides, so it is worrying to see a growing number of borrowers can no longer keep up with mortgage repayments and are having properties repossessed,” she said. “Those with larger portfolios may be forced to sell if margins continue to be squeezed.”
The latest figures come against a backdrop of broader pressure on homeowners. UK Finance reported that homeowner repossessions climbed by 47% in the past year, with interest rates also rising sharply. Bank of England data shows the average rate charged on outstanding mortgages reached 3.88% in June 2025, up from 2.93% a year earlier and 2.17% in 2020.
However, not all indicators point to a worsening crisis. The number of buy-to-let mortgages in arrears fell by 5% in the second quarter of 2025, leaving 11,270 cases on record. Of these, 4,100 were in the lowest arrears band — between 2.5% and 5% of the outstanding balance — down 6% from the previous quarter.
Overall, arrears remain historically low, representing just 1% of homeowner mortgages and 0.58% of buy-to-let mortgages.
In the second quarter of 2025, there were 87,380 homeowner mortgages in arrears of 2.5% or more, down 3% compared with the previous quarter. Within that, 29,840 were in the lightest arrears band, also down 3%.
Despite these improvements, repossessions are still edging higher. A total of 1,340 homeowner mortgaged properties were taken into possession in Q2 2025, up 10% from Q1.
Charles Roe, director of mortgages at UK Finance, highlighted the market’s resilience:
“Arrears are continuing to fall across both homeowner and buy-to-let mortgages, reflecting resilience in the market. The proportion of mortgages in arrears also remains below long-term averages, even amid the current economic uncertainty,” he said. “Lenders remain committed to helping customers manage their payments, and we urge anyone concerned to contact their lender early.”
Industry leaders hope that easing interest rates may provide relief. Mary-Lou Press, president of NAEA Propertymark, said:
“This should provide some relief to the many people who have been struggling with the cost of living over the last few years and shows that introducing more affordable mortgage products has helped ease pressures. Should interest rates continue to drop, we should see a positive effect of repossessions decreasing further in the future.”