## Rent arrears and claim values fall despite increased case numbers

According to recent figures from Reposit, the average value of rent arrears in the UK private rented sector fell to £1,980 in 2025, down from £2,143 in 2024. Similarly, the average claim value dropped by just over 2%, from £1,207 to £1,178 over the same period. Despite these declines in monetary terms, the frequency of rent arrears cases has risen, indicating that more tenants are experiencing financial difficulties, albeit with smaller debts per case.

## Financial pressures persist amid legislative changes

Ben Grech, Chief Executive of Reposit, commented on the findings: “It’s encouraging to see the average value of arrears and claims falling. However, the marginal rise in case volumes shows that financial pressure across the sector remains.” He also noted the impact of the Renters’ Rights Act, which is creating a more complex environment for landlords by fundamentally changing how arrears and repossessions are managed. With the abolition of Section 21, landlords are reportedly becoming more cautious in their approach to rent arrears.

For landlords, this means navigating a more challenging landscape where traditional methods of managing arrears and evictions are less straightforward. The increase in case numbers suggests a need for proactive rent management and tenant communication strategies to mitigate risks.

## Deposit shortfalls highlight protection gaps

Mr Grech also highlighted a significant issue with tenant deposits. The average cash deposit currently stands at £1,296, which is £629 less than the average arrears value. This shortfall exposes the limitations of the traditional five-week deposit, which may not provide sufficient protection for landlords when arrears escalate.

He explained, “As a result, we’re seeing growing demand for deposit solutions that offer greater financial protection for landlords and are FCA-regulated, while also reducing compliance risk for agents in light of the new regulations.” This suggests that landlords and agents should consider alternative or supplementary deposit schemes to better safeguard rental income.

## UK rents continue to rise despite arrears trends

The data aligns with Office for National Statistics (ONS) figures showing that average UK monthly rents increased by 4% to £1,368 in the 12 months to December 2025. This growth, although slightly slower than the 4.4% rise to November 2025, indicates ongoing upward pressure on rental costs.

Meanwhile, UK Finance reported that 9,520 buy-to-let mortgages were in arrears of 2.5% or more in the fourth quarter of 2025, a 9% decrease from the previous quarter. Additionally, 770 buy-to-let properties were taken into possession during the same period, down 14%. These figures suggest some easing in mortgage arrears and possessions, which may provide some relief to landlords balancing rental income and mortgage commitments.

## What this means for landlords

Landlords should be aware that while individual arrears amounts may be decreasing, the rise in cases signals broader tenant financial strain. The reduced effectiveness of traditional deposits means landlords may need to explore alternative deposit products or insurance-backed solutions to protect rental income. Additionally, the evolving legal framework requires landlords to stay informed and adapt their arrears management practices accordingly.

Suggested internal link anchors
– rent arrears
– claim values
– Renters’ Rights Act
– Section 21 abolition
– tenant deposits
– buy-to-let mortgage arrears
– rent increases
– repossession process
– landlord financial protection
– FCA-regulated deposit schemes

TLA update

TLA is launching a new Trusted Partners Hub in Q1 2026, featuring verified and approved service providers selected to support landlords, tenants, and property management businesses. We are inviting legal, trades, insurance, financial, mortgage, tenant screening, and other service providers to register their interest here: https://landlordassociation.org.uk/become-a-tla-service-partner/