Nearly one in five tenancies fell into rent arrears in the third quarter of 2026, according to new data from deposit alternative provider Reposit.
The share of tenancies in arrears climbed from 12% to 18% year on year. That puts 2026 on course for the highest rent arrears rate in three years, with an average of 18% across the first three quarters, compared with 15% over the same period in both 2025 and 2024. The value of arrears has stayed relatively static at £1,837, a rise of just £13 year on year.
Rents and wages
Rental price growth has slowed considerably compared with last year, but rents continue to climb and add to financial pressure on tenants amid the ongoing cost-of-living crisis. The latest Office for National Statistics (ONS) figures show average UK monthly private rent rose 3.8% to £1,406 in the 12 months to September 2026, which leaves rents £52 higher than a year ago.
Wages are growing at a similar pace. Annual regular wage growth stood at 3.7% in the three months to August 2026, with private sector pay growth at just 3%, while inflation reached 3.5% in September.
Ministry of Justice figures show landlord possession claims in England and Wales rose 6% year on year to 23,635 in the second quarter of 2026. The private rented sector is also adjusting to significant regulatory reform following the Renters’ Rights Act, including the abolition of Section 21 ‘no-fault’ evictions in England from May 2026.
“Average cash deposits of five weeks’ rent are now £1,258 – that’s more than £550 below the average arrears amount of £1,837,” said Ben Grech, chief executive of Reposit. “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.
“Due to the legislative changes, we’re seeing landlords become increasingly risk-averse, alongside high interest rates and ongoing high inflation. We’ve noticed a growing appetite for Reposit as landlords seek added protection and letting agents look to reduce compliance risks while tenants look to reduce their upfront costs.”