Rent arrears jumped by 44% to an average of £2,597 during the final three months of 2024, latest year-on-year figures reveal, while on a quarterly basis they increase by 26%.

Published by alternative deposits firm Reposit, the increases are driven by a variety of trends within the rental sector.

These are likely to include the frozen Local Housing Allowance which Labour has, like the Tories, refused to unfreeze, driving many tenants on benefits into arrears as they struggle to bridge the gap between their Universal Credit or housing benefit payments and their rent.

The cost of living crisis is also likely to be a factor, although landlords have voiced their fears that some tenants may run up arrears deliberately ahead of Labour’s Renters’ Rights Bill going live, which will make evictions both harder and take longer and force landlords to wait an extra month before beginning the eviction process.

Reposit claims that such a high average arrears figure – the highest it has seen – will leave landlords exposed because it’s far higher than the average rental deposit of £1,369, meaning many will have to bridge the £1,000 gap themselves after tenant moves out.

The company, which says its deposit product addresses this problem, also reveals that the average cost of fixing damage caused by bad tenants has hit £1,409.

Shortcomings

Its CEO Ben Grech (pictured) says: “With average arrears now surpassing £2,500, the shortcomings of cash deposit schemes have become increasingly evident.

“This is concerning for landlords, especially with the upcoming Renters' Rights Bill, which will abolish Section 21 evictions and eliminate a key layer of protection.

“Once enacted, the Bill will stipulate that tenants must be at least three months in arrears (currently two months) or 13 weeks for tenants paying weekly or fortnightly (currently eight weeks) before a landlord can effectively use a Section 8 notice to evict.”