Buy-to-let mortgage repossessions have risen 11% year-on-year, according to Moneyfacts, in what finance experts warn is a sign of squeezed landlord margins and market volatility.

Rising Repossessions a Warning Signal

Rachel Springall, finance expert at Moneyfacts, said: “Landlords have been facing hits from all sides, so it is worrying to see more borrowers unable to keep up with repayments. Those with larger portfolios may be forced to sell if margins remain tight. While multiple properties can boost profits, they also expose investors to greater risks if prices fall or void periods extend.”

UK Finance figures also show homeowner repossessions are up 47% year-on-year. The Bank of England reports the average mortgage rate rose to 3.88% in June 2025, compared with 2.93% a year earlier and 2.17% in 2020.

Arrears Picture More Positive

Not all indicators are negative. UK Finance data shows:

• BTL arrears fell 5% in Q2 2025, with 11,270 mortgages in arrears.

• Of these, 4,100 were in the lightest arrears band (2.5–5% of balance), down 6% on Q1.

• Overall arrears remain low – 1% of homeowner mortgages and 0.58% of BTL mortgages.

• Homeowner arrears stood at 87,380 in Q2, a 3% fall from Q1.

However, 1,340 homeowner properties were taken into possession in Q2, a 10% quarterly increase.

Industry Reaction

Charles Roe, Director of Mortgages at UK Finance, highlighted market resilience: “Arrears remain below long-term averages. Lenders are committed to supporting customers, and early engagement with lenders will not affect credit scores.”

Mary-Lou Press, President of NAEA Propertymark, added:  “More affordable mortgage products are easing pressures, and if interest rates continue to fall, affordability should improve further. This would likely bring repossession numbers down.”