Fewer landlords report rental arrears in latest research
Landlord Trends data reveals rental arrears have declined to 26%, the lowest since records began, with larger portfolio landlords still more affected. Tenant surveys show most manage rent despite ongoing financial pressures.
New research from Pegasus Insight shows a significant reduction in rental arrears among UK landlords over the past six years. The latest Landlord Trends report indicates that only 26% of landlords experienced arrears in the previous 12 months, down from a peak of 42% in 2020. This marks a sustained improvement following the financial strains of the pandemic period.
The data highlights that arrears remain disproportionately higher among landlords with larger portfolios. Two-thirds of landlords owning 11 or more properties reported arrears, compared with less than one-fifth of those with smaller portfolios. Meanwhile, tenant research conducted by Pegasus Insight involving 3,000 private renters found only 12% had missed a rental payment in the last year, with the majority describing their rent payments as manageable or comfortable.
Detailed findings on arrears and voids
The decline in arrears has been gradual but consistent, with a slight increase in the first quarter of 2026 followed by a return to the downward trend in the second quarter, which recorded the lowest incidence since tracking began. This suggests resilience in the rental market despite ongoing economic challenges.
Void periods, however, remain a persistent issue for landlords. Forty-one percent reported experiencing voids lasting more than seven days in the past year, with an average void duration of 66 days. Larger portfolio landlords and those managing Houses in Multiple Occupation (HMOs) are more likely to face voids, with 68% affected compared to 35% of smaller portfolio landlords.
Bethan Cooke, director at Pegasus Insight, emphasised that while the reduction in arrears is positive, financial pressures have not disappeared. Larger landlords continue to face higher exposure to arrears, and voids affect a significant proportion of landlords. She noted that inflationary pressures and rising operating and regulatory costs for landlords mean the situation remains delicate.
Context for landlords amid evolving rental market conditions
The sustained fall in arrears reflects broader shifts in the rental market since the pandemic. Government support schemes and tenant protections helped stabilise rent payments during the height of the crisis, but the gradual easing of these measures has tested landlord and tenant resilience. The current data suggests many tenants are managing to meet rent obligations despite inflation and cost-of-living pressures.
For landlords, the persistence of void periods highlights ongoing challenges in maintaining continuous rental income. Longer voids can impact profitability and cash flow, particularly for those with larger portfolios or HMOs where tenant turnover tends to be higher. Regulatory changes, including those related to tenant rights and property standards, also add to operational complexity and costs.
These trends come at a time when landlords face increased scrutiny and enforcement actions, as seen in recent council investigations and fines targeting non-compliant landlords. The rental sector continues to balance tenant affordability with landlord viability amid evolving legislation and market conditions.
Practical implications for landlords and letting agents
Landlords with larger portfolios should be particularly vigilant about arrears management and void minimisation strategies. This may include more proactive tenant engagement, rigorous referencing, and timely rent collection processes. Monitoring tenant financial wellbeing and offering support where appropriate can help reduce arrears risk.
Letting agents and landlords should also review void management practices to shorten vacancy periods. This could involve targeted marketing, flexible tenancy terms, or improvements to property appeal. Understanding local market demand and tenant preferences remains critical.
The data underscores the importance of maintaining compliance with safety and regulatory standards to avoid enforcement actions that could exacerbate financial pressures. Keeping accurate records of rent payments, communications, and property maintenance will support landlords in managing risks effectively.
Uncertainties and areas to watch
Despite the positive arrears trend, economic uncertainties such as inflation, interest rate changes, and potential policy shifts could impact tenant affordability and landlord income in the future. The balance between tenant protections and landlord rights remains a key area of debate and potential legislative change.
Void periods, while stable, continue to represent a financial risk, especially if market conditions deteriorate or demand weakens. Monitoring local rental market dynamics and regulatory developments will be essential for landlords and agents to adapt their strategies accordingly.
Landlords should stay informed of any forthcoming changes to tenancy laws, deposit protections, or safety obligations that could affect operational costs or tenant relations. Checking official government guidance regularly is advisable to ensure compliance and preparedness.
Considerations for landlords going forward
- Review rent collection and arrears management procedures, especially for larger portfolios.
- Implement strategies to reduce void durations, including property improvements and marketing tactics.
- Maintain thorough documentation of rent payments, tenant communications, and compliance actions.
- Stay updated on regulatory changes affecting tenancy rights, safety standards, and landlord licensing.
- Assess tenant affordability risks and consider flexible approaches to support tenants facing financial difficulties.
Supporting landlords with compliance and management tools
The Landlord Association (TLA) offers resources and support to help landlords and letting agents manage rental properties efficiently amid changing conditions. TLA membership provides access to compliance guides, document templates, and expert advice tailored to the private rented sector.
TLA is also developing ORBIT, a new property management and compliance platform currently in BETA testing. ORBIT aims to assist landlords and agents in organising property records, managing tenancy documentation, and recording key actions such as rent payments and inspections. This tool is designed to help members maintain evidence of compliance and stay on top of regulatory requirements.
Exploring TLA membership and ORBIT BETA access can be valuable for landlords seeking practical support to reduce arrears risk, manage voids, and navigate the evolving regulatory environment.
Looking ahead, landlords will need to balance operational efficiency with tenant affordability concerns to sustain rental income and meet compliance obligations in a complex market environment.
Sources: Landlord Today
TLA - The Landlord Association