The average rent arrears claim increased to £2,064 in the third quarte of the year – a rise of 22% from £1,694 in Q3 ’23, fresh data from Reposit has revealed.

The deposit alternative provider is keen to highlight that this amount is now far higher than a traditional five week cash deposit which averages £1,347 – and seeks to highlight how landlords could potentially be left exposed to a shortfall in the event of arrears.

Although the amount claimed in cases of arrears has seen a sharp year-on-year rise, the overall percentage of tenancies ending with outstanding rent has dropped in line with seasonal expectations. Between quarters, the arrears value in Q3 fell very slightly compared with the three months prior.

Some tenants have struggled this year as rents have continued to climb, at a time when the cost of living continues to take its toll for many people across the UK.

The effects of the headwinds faced by landlords were evident in the latest UK Finance stats which showed there were 13,000 buy-to-let mortgages in arrears of 2.5% or more of the outstanding balance in the third quarter of 2024, 4% fewer than in the previous quarter but up from 11,540 YoY.

Meanwhile, tenants have also continued to be affected by a lack of rental stock with available properties to rent now at their lowest in 15 years, falling to 259,000 in September 2024 for the whole of the UK, compared with 332,000 in September 2019 — a reduction of more than 22% (TwentyEA).

Ben Grech, CEO of Reposit said: “The amount claimed for each arrears case is now exceeding £2,000, substantially outstripping the value of a five week cash deposit and leaving landlords at risk from an excess cost of around £700 per claim.”

“The number of tenancies ending in arrears of more than five weeks rent is now 17%, meaning the cost of living crisis has highlighted that landlords need more extensive cover in the event of arrears, while tenants need a more efficient option to relieve the squeeze on their cash flow,” he added.