The value of both arrears and tenancy claims fell in 2025, suggesting some easing of financial pressure in the rental sector, according to new data from deposit replacement provider Reposit.
The average value of arrears dropped from £2,143 in 2024 to £1,980 in 2025, a reduction of 8%. Claims values also declined, falling from £1,207 to £1,178, a decrease of just over 2%.
However, the frequency of cases edged up marginally over the year. While 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. Rents are still rising, but the rate has slowed. ONS data shows average UK monthly rents rose 4.0% to £1,368 in the 12 months to December 2025, down from 4.4% growth in the 12 months to November.
Wider mortgage data also points to improving conditions. UK Finance recorded 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 same period, down 14%.
Despite those improvements, landlords and tenants continue to face high borrowing costs, stretched affordability and a shifting regulatory landscape.
"It's encouraging to see the average value of arrears and claims falling," said Ben Grech, CEO of Reposit (pictured). "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."
