Rent Arrears Soar, Tenants Face Squeeze

The latest data from Reposit reveals that average rent arrears have skyrocketed to £2,237 in Q1 2025, marking a whopping 23% increase from last year.

This surge is part of a larger trend, with arrears jumping 56% since 2023. Yikes!

The deposit scheme TDS and FCC Paragon report that rent arrears were behind one in five lettings disputes last year, with disputes involving arrears rising by 80%. It seems tenants are hitting the affordability ceiling, and landlords are feeling the pinch.

The rental market supply is dwindling, with just 284,000 homes available by the end of Q1 2025, a record low. This scarcity is driving up average monthly rents to £1,095, leaving tenants and landlords in a bind.

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Ben Grech, CEO of Reposit, highlights the pressure on landlords, noting that traditional deposit schemes fall short in covering arrears. With the Renters’ Rights Bill adding to landlords' challenges, including accommodating pets, concerns about property damage are on the rise.

Interestingly, despite the year-on-year increase, arrears charges dipped by 14% from Q4 2024, possibly due to seasonal financial pressures. As tenants and landlords navigate this tricky terrain, one thing's clear: the rental market is in for a bumpy ride!

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Want to hear more? Join Mal & Matt on the Property AI Report Podcast each week!

Access from your preferred podcast provider by clicking here

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