The average rent arrears claim climbed to £2,064 in the third quarter of this year, a 22% rise on the same period last year.

Data from deposit alternative provider Reposit reveals that this figure is now far higher than the average five-week cash deposit of £1,347, putting landlords at risk of being stung for a £700 shortfall if their tenant falls into arrears.  

Although the amount claimed has seen a sharp rise, the overall percentage of tenancies ending with outstanding rent has dropped in line with seasonal expectations; the arrears value in Q3 fell very slightly compared with the three months prior.

However, landlords continue to experience high interest rates and tenants are dealing with increasing rents while figures from Statista suggest the cost-of-living crisis is still ongoing for many in the UK, with 52% of all households reporting that their costs increased in August.

Ben Grech (pictured), CEO of Reposit, says with the incoming Renters’ Rights Bill, landlords are becoming increasingly conscious about protecting themselves in cases of rent arrears.

“The number of tenancies ending in arrears of more than five weeks rent is now 17%, meaning the cost-of-living crisis has highlighted that landlords need more extensive cover in the event of arrears, while tenants need a more efficient option to relieve the squeeze on their cash flow,” he adds.

Tenants who use 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. Landlords are guaranteed payment in the event of a tenant defaulting on any charges normally covered by a cash deposit.