Q2 figures show further decline in mortgage arrears

August 22, 2026 by Brendan O'Neill

Surveys and Statistics

The latest figures show that 2026’s second quarter saw a further decline in mortgage arrears, which marks the eighth quarter in a row where this is the case.

UK Finance has released data for the quarter. It shows a total of 77,940 mortgage holders with arrears of at least 2.5%. This is a drop of 1% on the total for the quarter before. Mortgage arrears have now been in decline for the past eight quarters, which is encouraging news for lenders and for the wider economy.

Of the total arrears for Q2, 27,100 fell into the smallest arrears category. This band covers debts from 2.5% to 5% of the total sum owed. Again, this is a 1% drop compared with Q1.

In terms of outstanding purchase mortgages, arrears made up just 0.89% of the total debt. For buy-to-let loans, only 0.44% of the total outstanding debt is due to arrears. Those mortgages also saw the biggest overall drop in arrears, by 6%.

Mark Harris works for SPF Private Clients as its mortgage broker chief executive. He pointed out that this latest decline in mortgage arrears had come during a period when people are financially stretched.

He was quoted by Financial Reporter as saying:

“The figures also indicate that lenders continue to show forbearance and are working with borrowers to try and find a solution when the latter find themselves in difficulty.”

Harris added that repossessing homes was seen as the final resort.

Those with the CeMAP mortgage advisor qualification can negotiate with lenders on behalf of borrowers who are struggling with payments.