The value of both arrears and tenancy claims fell in 2025 compared with the previous year, suggesting a slight easing of financial pressure in the rental sector, new data from Reposit has revealed.
Throughout 2025, the average value of arrears dropped to £1,980 from £2,143 in 2024, an 8% reduction.
Claims values also declined, falling from £1,207 to £1,178, a decrease of just over 2%.
However, while the monetary value of arrears and claims reduced, the frequency of cases edged up marginally over the year, indicating that although the scale of debt per case was lower, more tenants fell into difficulty.
The fall in arrears values may reflect a cooling in rental growth. While rents are still increasing, the rate has slowed. According to the latest ONS data, average UK monthly rents rose by 4.0% to £1,368 in the 12 months to December 2025, down from annual growth of 4.4% in the 12 months to November.
Wider mortgage data also points to improving conditions. UK Finance reported 9,520 buy-to-let mortgages in arrears of 2.5% or more in Q4 2025, 9% fewer than the previous quarter, while 770 buy-to-let properties were taken into possession during the quarter, down 14%.
While the latest figures suggest some easing in overall arrears values, landlords and tenants are continuing to contend with high borrowing costs, stretched affordability and a changing regulatory framework.
Ben Grech, CEO of Reposit, said: “It’s encouraging to see the average value of arrears and claims falling. However, the marginal rise in case volumes shows that financial pressure across the sector remains.
“At the same time, the Renters’ Rights Act is creating a more complex operating environment for landlords, fundamentally changing how arrears and repossessions are managed. With the abolition of Section 21, many landlords are understandably becoming more cautious in their approach to rent arrears.
“The average cash deposit now stands at £1,296 which is £629 below the average arrears value. This shortfall highlights the limitations of traditional five-week deposits which often fail to provide adequate protection when arrears escalate.
“As a result, we’re seeing growing demand for deposit solutions that offer greater financial protection for landlords and are FCA-regulated, while also reducing compliance risk for agents in light of the new regulations.”
