Nearly one in five tenancies fell into rent arrears in the third quarter of 2026, according to new data from Reposit, with 18 percent of tenancies affected compared with 12 percent a year earlier.
The figures were released on 4 November and put 2026 on course for the highest arrears rate in three years. The average across the first three quarters stands at 18 percent, against 15 percent over the same period in both 2025 and 2024.
Landlords now face a sharper cashflow risk at the same time as regaining possession has become harder. Section 21 no-fault evictions were abolished in England in May 2026, while the average arrears balance far exceeds the typical cash deposit held.
Arrears cases climb as values hold at £1,837
The value of arrears has stayed almost flat even as case numbers jumped. Reposit puts the average balance at £1,837, a rise of just £13 year on year, which points to more tenants slipping behind rather than individual debts getting much larger.
Rental growth has cooled but rents are still rising. Average UK monthly private rent increased 3.8 percent to £1,406 in the 12 months to September 2026, leaving rents £52 higher than a year ago. Annual regular wage growth was 3.7 percent in the three months to August, with private sector pay growth at only 3 percent while inflation reached 3.5 percent in September.
Strain is also visible in the courts data. Landlords who tightened referencing after the Renters Rights Act reforms are still seeing more cases progress to formal action, and extra court capacity for possession work underlines how much pressure the system is under.
Deposit shortfall leaves landlords exposed
Reposit compares the £1,837 average arrears figure with average cash deposits of five weeks rent at £1,258, a gap of more than £550. For landlords taking a conventional cash deposit, that leaves a large part of a typical arrears balance uncovered before damage or cleaning costs are even considered.
Ben Grech, chief executive of Reposit, said the combination of higher arrears frequency and tougher repossession rules had changed the risk calculation. “Average cash deposits of five weeks rent are now £1,258 – that is 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,” Grech said.
He said landlords were becoming more risk averse amid legislative change, high rates and persistent inflation, with growing interest in deposit alternatives. Tenants who use Reposit pay one weeks rent as a fee instead of five weeks upfront, subject to referencing or a UK guarantor, with landlords covered by an insurance-backed structure.
Rents outpace wages as possession claims rise
Ministry of Justice figures show landlord possession claims in England and Wales rose 6 percent year on year to 23,635 in the second quarter of 2026, a further sign that payment problems are feeding through to enforcement.
This follows Landlord Knowledge’s August report on landlords tightening references and guarantor demands since the Renters Rights Act, which found 40 percent of landlords had toughened checks. The latest Reposit figures suggest that shift has not been enough to hold back the rise in arrears cases.
The full trend data is published on Reposit’s arrears index dashboard, which tracks cases and values across its tenancy base.
What this means for landlords
- If you take five-week cash deposits: a typical £1,837 arrears balance would leave more than £550 uncovered, so review whether your deposit, rent guarantee or insurance cover matches current arrears levels.
- Watch for: slower but still positive rent growth alongside wage growth below inflation, which keeps affordability tight and raises the odds of partial or late payment.
- Bottom line: with Section 21 gone and possession claims rising, prevention through referencing, guarantors and early arrears action matters more than relying on the deposit at the end.
Editor’s view
The case count is the warning here, not the average balance. More tenants falling behind by similar amounts points to broad affordability strain rather than a few large defaults. After May’s reforms, landlords cannot price that risk through easy possession, so underwriting and cover need to do the heavy lifting.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 05 November 2026
Sources: Reposit, Office for National Statistics, Ministry of Justice
Related reading: August: 40% of landlords tighten references since RRA
