Rental arrears reached a new high during the first quarter of 2026. The news comes from Reposit, who found the average rental arrears figure is now £2,281.
The rate at which tenants have missed rental payments has been climbing for some time. Arrears surged by 27% between Q1 2023 and Q1 2024, followed by a further 23% increase between Q1 2024 and Q1 2025.
These increases may not surprise landlords, as the cost of living crisis is making tenants reconsider where their money goes first.
Although the rate of arrears has slowed to a 2% year-on-year increase, the fact remains. More tenants are falling behind with their rent now, when compared to last year.
Cost of living continues to add pressure
The conflict in Iran is piling on financial pressure and the energy price cap is due to increase in July, rising by 13%. This is expected to add roughly £18 a month to the average energy bill.
If Reposit was to run this research again at the end of 2026, LandlordBuyer would bet money on the rate of rental arrears rising above 2%. Justifying our thinking are the latest figures from HomeLet.
More rent, more arrears, more tax
After a period of cooling rents, increases are back with a vengeance. HomeLet’s latest rental index revealed rents for newly agreed tenancies increased +1.1% in the last month. The UK’s average monthly rent is now £1,340.
The most recent rent increase means yearly rental inflation is running at 2.5%. Although we are nowhere near the double-digit rises seen in the early 2020s, tenants are paying more when they decide to rent a property.
While on the surface higher rents sounds like a good thing for landlords – more income – it’s a double-edged sword. When more money is being paid, the chances of a tenant defaulting due to affordability increases.
We also have to mention tax. A higher rent can be an false economy as the more a landlord receives in rental income, the more they are taxed. This is especially true if it nudges them into a higher tax bracket.
Ground 8: a tougher route to possession
Now for the possession kicker. The Renters’ Rights Act redrew the eviction landscape when it came to arrears. Landlords now have to wait longer – and wait for a bigger amount of arrears to accumulate – before they can start the possession process.
As a reminder, landlords with arrears can only use Section 8, Ground 8 to evict. The new legislation states:
- A tenant needs to owe 3 months' rent for a monthly tenancy (or 13 weeks' rent for a weekly tenancy) for an eviction to be valid. This is up from 2 months' rent for a monthly tenancy (or 8 weeks' rent for a weekly tenancy).
- Ground 8’s notice period doubled from 1st May 2026, from 2 to 4 weeks’ notice. That means tenants who aren’t paying rent can remain in the property for longer.
- A tenant cannot be evicted using Ground 8 if they pay off what they owe or owe less than the amounts detailed above by the time you get to court.
- A landlord can’t evict their tenant if they owe 3 months (or 13 weeks) rent because the renter has not received their Universal Credit. Benefits are not counted when a tenant owes rent.
LandlordBuyer can nip the problem of rent arrears in the bud. We buy tenanted buy-to-lets, even where there are rental arrears. We won’t ask you to clear the arrears or evict your tenants before we make you a cash offer to buy your property.
Once our offer is accepted, you can exchange and complete in an average of 35 days. Often this timeframe is quick enough to prevent another month from passing where the rent goes unpaid – any before the next mortgage repayment is due.
There are no estate agent, legal or EPC fees to pay when you sell to LandlordBuyer. We are professional property purchasers and landlords, with cash reserves and a team who will take your tenancy over.
If rental arrears are building at a buy-to-let you own, contact us. We can buy your property before you qualify for a Ground 8 eviction or if you simply want to avoid the hassle of serving a Section 8 notice.