The average value of rental arrears and tenancy claims declined in 2025 compared with the previous year, though the number of cases increased, according to data from deposit alternative provider Reposit.
Average arrears values dropped 8% from £2,143 to £1,980, while average claims values fell 2% from £1,207 to £1,178. The reduction occurred despite a slight uptick in the total number of cases, indicating more tenants experienced difficulties but with smaller individual debt amounts.
Rental growth slows
The decline in arrears values may correlate with moderating rental growth. Office for National Statistics data shows average UK monthly rents increased 4.0% to £1,368 in the year to December 2025, down from 4.4% growth in November.
Buy-to-let mortgage arrears also showed improvement. UK Finance reported 9,520 buy-to-let mortgages in arrears of 2.5% or more in Q4 2025, representing a 9% quarterly decrease. Property possessions fell 14% to 770 properties in the same period.
Deposit protection concerns
The data reveals a gap between typical deposit amounts and arrears values. The average cash deposit stands at £1,296, which is £629 below the average arrears value of £1,980.
Ben Grech, CEO of Reposit, noted that the Renters’ Rights Act is changing the operating environment for landlords, particularly regarding arrears and repossessions management. With the abolition of Section 21, landlords are becoming more cautious in their approach to rent arrears, he said.
Grech added that traditional five-week deposits often fail to provide adequate protection when arrears escalate, leading to increased demand for alternative deposit solutions.
The rental sector continues to navigate challenges including elevated borrowing costs, affordability pressures, and regulatory changes affecting both landlords and tenants.
