Rental arrears fall to all-time low
The proportion of landlords experiencing rental arrears has fallen to an all-time low, with 26% reporting arrears in the past 12 months, according to the latest Landlord Trends research from Pegasus Insight, completing a sustained six-year decline from the 42% recorded at the peak in 2020.
The improvement in arrears performance has been fairly consistent, easing gradually from the highs of the pandemic period through successive quarters. Despite a slight uptick in Q1 2026, the longer-run trend has reasserted itself, with Q2 representing the lowest incidence recorded since tracking began.
Where arrears do occur, they remain concentrated among larger portfolios. 66% of landlords with 11 or more properties experienced arrears in the past year, compared with 18% of those with between one and ten properties.
The arrears figures are supported by separate Wave 1 2026 Tenant Trends research from Pegasus Insight, based on 3,000 interviews with private renters. Only 12% of tenants said they had missed a rental payment in the last year, and around nine in ten describe their rent as either manageable or comfortable. However, the findings also underline the continued pressure on household finances, with a significant minority of tenants having to make difficult choices between rent and other essential spending.
While arrears have continued to fall, void periods remain a more persistent feature of landlords’ experience. 41% of landlords experienced a void of more than seven days in the past 12 months, with each lasting 66 days on average. Voids are markedly more common among larger portfolio landlords and HMO operators, with 68% of those with 11 or more properties affected compared with 35% of those with smaller portfolios.
Bethan Cooke, director at Pegasus Insight, commented: “Rental arrears falling to 26% is encouraging, particularly after the financial pressures experienced by tenants and landlords over recent years. But it is important not to interpret this as evidence that those pressures have disappeared. Larger portfolio landlords remain much more exposed to arrears, while voids continue to affect four in ten landlords.
“Our tenant research also shows that most renters are continuing to meet their housing costs, but many household budgets remain stretched. With inflationary pressures persisting and landlords facing higher operating and regulatory costs, the position remains finely balanced. The priority now should be to avoid adding further pressures that could ultimately feed through into rents or reduce the supply of homes available to tenants.”