Rent Arrears & the Renters’ Rights Bill: What Landlords Need to Know

A tenant not paying rent (or falling behind), is every landlord’s worst day. It’s also the most common reason for eviction and sleepless nights.

Good News: Arrears Are Dropping - For Now

Property118.com reported that recent data from Reposit shows that in Q2 2025, average rent arrears plummeted 12% year-on-year, to around £1,861. That’s also a 20% drop from Q1’s average of £2,237.

But it wasn’t always trending down. In Q1 2025, arrears peaked to a 23% increase year-on-year. So what’s changed? Slower rent inflation seems to be easing the pressure just enough to make a difference. Yet traditional security deposits still lag. Reposit noted that the average cash deposit is now £1,316, while average arrears are substantially higher, highlighting just how inadequate standard deposit schemes really are.

Most Landlords Haven’t Seen Arrears

According to the English Private Landlord Survey 2024, a solid 80% of landlords reported having had NO tenants in arrears over the past two years. And if you're a landlord with a single property, that number jumps to 91%. Still, landlords managing larger portfolios had more arrears, with only 51% of those with five or more properties reported no arrears.

The Renters’ Rights Bill Is Changing the Eviction Game

The Renters’ Rights Bill is reshaping the rules:

• Section 21 no-fault evictions are being scrapped. Landlords will need valid legal grounds (e.g. persistent rent arrears) to regain possession.

• The arrears threshold for issuing a Section 8 eviction notice will increase—from 2 months (8 weeks) to 3 months (13 weeks).

• Notice periods are extending too, from 2 weeks to 4 weeks.

While it's designed to protect tenants, this legislation also means that landlords should consider stepping up their risk management, because evicting for nothing is going to get a lot harder.

The Case for Guaranteed Rent

Here’s where our guaranteed rent scheme comes in, to help you avoid arrears altogether:

• We offer steady income, so no more stressing over unpaid rent.

• We include a lot of protection against the Renter's Rights Bill - e.g. offering a lifeline when Section 21 disappears and Section 8 becomes the only route.

• They often replace outdated cash deposits with deposit alternatives, which can better match actual arrears exposure.

What You Can Do: 7 Simple Steps to Minimise Arrears

1. Vet tenants carefully - good references and reliable income go a long way.

2. Use deposit alternatives rather than just cash - these often cover more than the typical five-week deposit.

3. Offer rent in advance or use guarantors - both remain effective tools according to the survey.

4. Invest in legal expenses and rent protection insurance - essential once Section 21 evaporates.

5. Communicate early and clearly with tenants who are struggling - most arrears begin gradually, and early dialogue can help avoid crises.

6. Explore mediation before pursuing eviction - it's faster, cheaper, and less damaging to relationships.

7. Consider guaranteed rent - lock in your income and shift arrears risk to a trusted provider.

   
   

Rent arrears haven’t disappeared, but some early signs in 2025 suggest things are getting marginally better, especially with rent price inflation slowing and deposit alternatives gaining traction.

Still, the landscape is shifting underneath landlords’ feet. With Section 21 on its way out and higher thresholds for eviction, it’s more important than ever to be proactive.

For peace of mind and less hassle, consider looking into our guaranteed rent scheme. That way, you’re not just reacting - it’s about staying ahead.