The worth of lease arrears has fallen for the third consecutive quarter of 2025, new analysis has revealed.
That is the primary time within the final 5 years value of knowledge that arrears values have fallen over three consecutive quarters.
Common arrears values had been recorded at £1,824 in Q3 25 which is 13% decrease than in Q2 25 and 23% decrease than Q1 25. Arrears are additionally occurring much less often with instances down 29% in contrast with Q2.
This decline in arrears could also be linked to a slowdown in rental progress. Whereas rents proceed to rise, the speed of enhance has eased barely. In keeping with the most recent ONS figures, common UK month-to-month personal rents grew 5.5% to £1,354 within the 12 months to September 2025, down from 5.7% within the 12 months to August.
In the meantime, wider market information from one mortgage agency for Q3 25 confirmed the BTL arrears fee elevated very barely by 0.1%, whereas Direct Debit Rejections (DDRs), a type of missed cost, fell 7.9%.
Common claims values have additionally fallen for the third consecutive quarter and are actually at a median of £983. The variety of instances has risen since Q2 however is in step with earlier Q3 intervals.
Landlords and tenants proceed to navigate a difficult atmosphere, with the Financial institution of England base fee at 4% and inflation at 4.1%, alongside upcoming legislative adjustments underneath the Renters’ Rights Invoice. Amongst different measures, the Invoice will increase the arrears threshold required for landlords to concern a Part 8 discover, making repossessions extra complicated.
The Invoice stipulates that tenants should be at the very least three months in arrears (beforehand two months) or 13 weeks for tenants paying weekly or fortnightly (beforehand eight weeks) earlier than a landlord can successfully use a Part 8 discover to evict.
Ben Grech, CEO of Reposit, which carried out the analysis, stated: “The autumn within the worth of arrears and of their frequency is encouraging nevertheless it doesn’t inform the complete story. Many landlords stay uncovered as a result of conventional deposits are nonetheless inadequate to cowl common arrears, which now exceed £1,800 in contrast with typical money deposits of £1,380.
“As laws adjustments, landlords are in search of extra dependable methods to guard their earnings. Options similar to Reposit that present prolonged cowl and compliance help are more and more necessary, significantly as rates of interest and inflation proceed to place stress on each tenants and property house owners.
“The mix of slowing lease progress, excessive borrowing prices, and new authorized thresholds for repossession is making a extra cautious rental market. For landlords, this implies assessing danger rigorously and contemplating enhanced safety measures, whereas tenants could face stricter referencing and affordability checks to make sure tenancies stay sustainable.”
