Rent arrears have risen sharply over the past year, with almost one in five tenancies now recording missed or outstanding payments, according to new figures from Reposit. The deposit alternative provider reports that 18% of tenancies fell into arrears during the third quarter of 2026, up from 12% a year earlier. That represents a 50% increase in the proportion of tenancies affected, raising fresh concerns for landlords and letting agents.
Arrears rate on course for three-year high
The figures put 2026 on course for the highest arrears rate in three years. Across the first nine months of the year, an average of 18% of tenancies recorded arrears. That compares with 15% during the same period in both 2024 and 2025.
However, while more tenancies are falling behind, the average debt has barely changed. Reposit puts the average amount owed at £1,837, just £13 higher than a year ago.
Rising rents pile pressure on tenants
The increase comes as tenants continue to face higher housing costs, despite slower rental inflation. Office for National Statistics figures show average UK private rents reached £1,406 a month in September. That represents an annual increase of 3.8%, or £52 a month.
Meanwhile, regular wage growth stood at 3.7% in the three months to August. Private sector pay rose by 3%, while inflation reached 3.5% in September.
Separate Ministry of Justice figures show landlord possession claims in England and Wales rose by 6% year-on-year. Courts received 23,635 claims during the second quarter of 2026, although these cover several possession grounds, not just rent arrears.
Landlords face growing financial exposure
The figures come as landlords adjust to the Renters’ Rights Act, which took effect in England in May. The legislation abolished Section 21 no-fault evictions and changed the process for landlords seeking possession.
Ben Grech, chief executive of Reposit, warned that unpaid rent can quickly exceed the protection offered by a traditional tenancy deposit. “Average cash deposits of five weeks’ rent are now £1,258 – that’s more than £550 below the average arrears amount of £1,837,” he said. “With the Renters’ Rights Act also making it harder for landlords to regain possession of their properties, the financial risk associated with tenant arrears has become a bigger concern than ever before.”
The figures put average arrears £579 above the average five-week cash deposit. However, this comparison does not establish how often landlords suffer losses beyond their deposits or how much unpaid rent they subsequently recover. Nor does the data establish a direct link between the Renters’ Rights Act and the increase in arrears.
Landlords becoming more cautious
Grech said the combination of regulatory reform, inflation and borrowing costs was changing landlord behaviour. “Due to the legislative changes, we’re seeing landlords become increasingly risk averse, alongside high interest rates and ongoing high inflation,” he said. “We’ve noticed a growing appetite toward Reposit as landlords seek added protection and letting agents look to reduce compliance risks while tenants look to reduce their upfront costs.”
Reposit provides an insurance-backed alternative to traditional cash deposits. Under its scheme, tenants pay a non-refundable fee equivalent to one week’s rent rather than a cash deposit of up to five weeks’ rent. The company says its product covers eligible landlord claims for unpaid rent and property damage. Tenants remain liable for any sums owed.
The arrears figures come from Reposit, rather than an industry-wide survey, and the company has not specified the number of tenancies analysed. Nevertheless, the reported rise in arrears presents a concern for letting agents managing rental payments and advising landlords on tenant affordability. With almost one in five tenancies in Reposit’s figures recording arrears, the challenge for agents is identifying payment problems early and preventing missed rent from turning into substantial debt.
