The Intermediary – November 2025 - Flipbook - Page 74
BUY-TO-LET
Opinion
Arrears management
has never been
more crucial
A
s the Renters’ Rights
Bill approaches Royal
Assent, leing agents
across England are
preparing for the
biggest change to
leings in 30 years. The Government’s
impact assessment estimates agents
could lose nearly £400m in revenue
over 10 years, largely due to tenants
staying in properties longer, while
the wider changes to the sector see
landlords collectively facing losses of
over £1.02bn during the same period.
However, there is another threat to
rental income: the growing risk of
rent arrears.
Affordability pressures are
mounting. According to the Office
for National Statistics (ONS), average
monthly rents in England reached
£1,403 in August, a 5.8% increase yearon-year. Meanwhile, average wage
growth was lower at 4.7%.
The growing gap between tenants’
rent and income makes them more
likely to fall behind, and under the
new legislation, landlords and agents
can’t act as quickly.
The Bill will abolish Section 21 ‘no
fault’ evictions. Currently, landlords
who need to recover a property for
unpaid rent can still serve a Section
21 eviction notice, but once the
Renters’ Rights Bill is enacted, an
arrears eviction notice can only be
served aer three full months of rent
arrears – and unless the tenant leaves,
landlords need to go through a full
court hearing.
With average court delays
already at 27.9 weeks from notice
to repossession, landlords could be
waiting six months or more to regain
possession, and may then need further
court action to recover missing rent.
What’s also clear is that deposits
won’t cover the shortfall. Generation
70
The Intermediary | November 2025
Rent’s Freedom of Information (FOI)
data shows the average deposit in
England and Wales is just £1,118,
less than one month’s rent in
most regions.
Before the keys
Against this backdrop, it’s clear arrears
management needs to be embedded
into your rental strategy, starting
before the tenant moves in. We know
from Rightmove that, on average, 11
tenants enquire per property, but not
all tenants are equal.
Our tenant referencing strategic
partners HomeLet and Let Alliance,
who together operate one of the UK’s
biggest tenant referencing services for
agents and landlords, identify more
than 150 potential fraud cases daily.
Without robust checks, these tenants
could end up in your properties,
and potentially in arrears. Finding
and placing the right tenant is your
first step.
Sell the benefits
Once a tenancy begins, early arrears
intervention becomes critical. If you’re
an agent or landlord and you only
check rent payments monthly, you
could miss weeks when you could help
those tenants address their arrears.
Bank-integrated rent payment
platforms like PayProp help agents
keep their finger on the pulse. Linked
to your bank account, such tools can
automatically flag who has paid and
who hasn’t, allowing you to monitor
arrears 24/7, and when alerted, to send
reminders by email or text, in just a
few clicks.
The numbers really speak for
themselves. We looked at the top 10%
of PayProp-powered agencies with the
lowest arrears. In September, they
had fewer than 1.4 tenants in arrears
per agency, owing just £513 on average
DR NEIL COBBOLD
is commercial director at Reapit
– less than 39% of average monthly
rent. This limits the impact on income
and gives great data points agents can
use to sell their service to prospective
landlords. While correlation alone
doesn’t prove causation, it is striking
that the same 10% of agencies also
grew their leings commission
income by over 13% in the past year.
But even the best processes can’t
prevent every case of arrears. That’s
why some landlords and agents are
turning to rent guarantee insurance.
The most comprehensive policies
don’t just protect landlords from
lost rent; they also safeguard leing
agencies from the financial impact of
prolonged arrears.
While no one wants to rely on an
insurance claim, it does provide the
assurance if things go wrong. Property
professionals could soon face over
six months of unpaid rent if a tenant
defaults and eviction proceedings are
delayed. That missing income might
be a lifeline – a mortgage payment or
a pension.
Knowing you won’t be le out of
pocket can make all the difference,
not just financially, but in building
trust with prospective landlords,
maintaining trust with your current
clients, and stability within an agency.
The Renters’ Rights Bill is a wake-up
call. The changes mean landlords and
agents need to refocus and put arrears
management at the heart of how
they operate.
With the right tools, property
professionals can take control by
veing tenants thoroughly, acting
early on arrears, and puing
insurance in place. They will be the
ones best placed to grow under the
Renters’ Rights Bill. ●
