1,030 homeowner-mortgaged properties were repossessed, a 12% increase on the previous quarter and a 54% increase year-on-year. Buy-to-let repossessions remained static quarter on quarter, at 700, however increased 30% compared with the same period a year earlier.

Despite the increase in repossessions, which remain far below levels seen in 2009, UK Finance highlighted a “confirmed downward trend” in mortgage arrears.

The proportion of mortgages in arrears is low, at 1.06% for homeowners and 0.65% for buy-to-let. The total number of homeowner mortgages in arrears (92,170) fell by 2% compared to both the previous quarter and Q4 2023. Buy-to-let arrears also decreased.

Charles Roe, director of mortgages at UK Finance, said: “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.

“This reflects the fact that, while pressures remain, the challenges of higher interest rates and cost of living increases have begun to ease. 

“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. Lenders offer a range of support to anyone worried about their finances. If you’re worried about your finances, please reach out to your lender as soon as possible to discuss the help available. Doing so won’t affect your credit score.”