Rental arrears reached a new high in the first quarter of 2026, although the pace of growth has slowed significantly compared with the sharp increases seen over the past two years.
New figures from Reposit show average arrears climbed to £2,281 during Q1, reflecting the continued financial pressure facing tenants amid higher living costs and elevated borrowing rates.
However, arrears rose by just 2% year-on-year, suggesting conditions may be beginning to stabilise after a period of steep increases. By comparison, arrears had jumped by 27% between Q1 2023 and Q1 2024, followed by a further 23% rise the following year.
The figures broadly mirror wider trends across the buy-to-let market. Data from UK Finance showed that by the end of Q4 2025, the number of buy-to-let mortgages in arrears had fallen quarter-on-quarter, indicating some easing in financial stress levels across the sector.
Despite the slower rate of arrears growth, affordability pressures remain for both tenants and landlords, with interest rates still relatively high and inflation continuing to affect household budgets.
Ben Grech, CEO of Reposit, said: “We know that landlords are becoming increasingly risk-averse, placing greater emphasis on financial security and tenant reliability.
“While there are early signs that arrears are beginning to stabilise, they remain slightly elevated, as both landlords and tenants continue to feel the impact of sustained cost pressures.
“With the Renters’ Rights Act now in place and the abolition of Section 21 no-fault evictions, landlords are understandably becoming more cautious, given the reduced flexibility in how they manage tenancies.”
He added: “The average traditional deposit stands at £1,308 which is £973 below the average arrears value, highlighting the limitations of traditional deposit schemes. In this environment, solutions that reduce risk, improve affordability and provide greater protection for landlords will play a key role in supporting a more balanced and resilient rental market.
“At the same time, they enable renters to retain access to their money and use it for immediate needs, such as moving costs, or to invest for a return, rather than locking the money away for several years.”
