Nearly one in five tenancies fell into rent arrears in the third quarter of 2026, according to new data from Reposit.
The figures reveal a sharp rise in arrears cases, climbing from 12% to 18% year-on-year. This puts 2026 on course for the highest 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, however, has remained relatively static at £1,837, a marginal rise of just £13 year-on-year.
While rental price growth has slowed considerably compared with last year, rents continue to climb, placing further financial pressure on tenants amid the ongoing cost-of-living crisis.
According to the latest Office for National Statistics (ONS) figures, average UK monthly private rent rose by 3.8% to £1,406 in the 12 months to September 2026. Despite slowing rental inflation, rents remain £52 higher than a year ago, adding to pressure on household budgets.
Meanwhile, annual regular wage growth stood at 3.7% in the three months to August 2026, with private sector pay growth at just 3%, as inflation reached 3.5% in September.
Elsewhere, Ministry of Justice figures show landlord possession claims in England and Wales rose by 6% year-on-year to 23,635 in Q2 2026, highlighting continued challenges across the rental market.
These challenges come as the private rented sector continues to adjust to significant regulatory reform following the implementation of the Renters’ Rights Act, including the abolition of Section 21 ‘no-fault’ evictions in England from May 2026.
Ben Grech, CEO of Reposit, said: “Average cash deposits of five weeks’ rent are now £1,258 – that’s more than £550 below the average arrears amount of £1,837. 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 toward Reposit as landlords seek added protection and letting agents look to reduce compliance risks while tenants look to reduce their upfront costs.”
Tenants who choose Reposit pay one week’s rent as a non-refundable fee instead of having to find five weeks’ rent at the start of their tenancy. All tenants are eligible to use Reposit provided they pass referencing or provide a UK guarantor.
Reposit’s insurance-backed product structure means that landlords are guaranteed payment in the event of a tenant defaulting on any charges normally covered by a cash deposit. The tenant remains liable for any damage at the end of the tenancy, with any disputes resolved through an independent resolution service within 14 days.
