New research from Reposit indicates a positive trend in the UK rental market, with the value of rent arrears falling by 12% in the second quarter of this year to an average of £1,861. This also represents a significant 20% drop from the first quarter.

The reduction in arrears may be linked to a recent slowdown in the pace of rent increases. According to government figures analyzed by Reposit, average monthly private rents rose by 7.0% in the year to May 2025, down from 7.4% in April and notably lower than the 9% annual increases seen at the end of 2024.

In the buy-to-let (BTL) market, arrears also saw a 5% drop, according to UK Finance figures. Despite these improvements, landlords and tenants continue to face financial pressures from high interest rates and inflation, as well as the uncertainty surrounding the upcoming Renters Rights Bill.

Ben Grech, CEO of Reposit, noted that while the drop in arrears is a welcome sign, traditional deposit schemes are still inadequate, as the average cash deposit (£1,316) is significantly less than the average arrears value (£1,861). He adds that with legislative changes on the horizon, landlords are increasingly seeking added protection to manage the unpredictable landscape.