Rent arrears value plummets by 12% in a year

The value of rent arrears fell by 12% in the second quarter of 2025, reaching £1,861 compared to the same period in 2024.

This marks the first annual decline for a second quarter since 2021, according to data from Reposit, the tenancy deposit alternative provider.

The figure also reflects a 20% drop from the first quarter of 2025, when arrears averaged £2,237.

The fall coincides with a slowdown in rent price inflation with the Office for National Statistics stating that rents were up 5.9% to £1,343 in the year to July.

Landlord financial pressures

The firm’s chief executive, Ben Grech, said: “The drop in the value of rent arrears is a welcome sign that some financial pressures on landlords and tenants may be easing very slightly, likely driven by the recent slowdown in rental costs.

“However, the average cash deposit now stands at £1,316 which is £545 less than the average arrears value and underscores the inadequacy of traditional deposit schemes which offer just five weeks of protection.”

Reshape how rent arrears are handled

He added that landlords are navigating an unpredictable landscape of high interest rates, ongoing inflation and legislative changes.

Mr Grech said: “The Renters’ Rights Bill could fundamentally reshape how arrears are managed and how repossessions are handled.

“We’re seeing a clear shift toward Reposit as landlords seek added protection and letting agents look to reduce compliance risks ahead of the reforms.”

The proportion of tenancies ending with outstanding rent also saw a marginal drop of about 1% compared to Q1 2025.