The proportion of UK landlords experiencing rental arrears has fallen to its lowest level since tracking began, with 26% reporting arrears in the past 12 months, down from a peak of 42% recorded in 2020, according to Landlord Trends Q2 2026 research from Pegasus Insight conducted among 567 members of the National Residential Landlords Association.
The decline has been broadly consistent over six years, easing gradually from the highs of the pandemic period through successive quarters. A slight uptick in Q1 2026 did not interrupt the longer trend, with Q2 representing the lowest figure in the series.
The picture differs sharply by portfolio size. Where arrears do occur, they are concentrated among larger operators: 66% of landlords with 11 or more properties experienced arrears in the past year, against 18% of those with between one and ten properties.
Separate Tenant Trends research from Pegasus Insight, based on 3,000 interviews with private renters in Wave 1 2026, broadly supports the arrears improvement. Just 12% of tenants reported missing a rental payment in the past year, and around nine in ten described their rent as either manageable or comfortable.
The same research found that a significant minority of tenants continue to make difficult choices between rent and other essential spending, pointing to household budgets that remain under strain despite the headline improvement.
Void periods present a more persistent picture. A void of more than seven days in the past 12 months was reported by 41% of landlords, with each lasting an average of 66 days. As with arrears, the exposure was heavier among larger portfolio operators and HMO landlords: 68% of those with 11 or more properties experienced a void, compared with 35% of those running smaller portfolios.
"Rental arrears falling to 26% is encouraging, particularly after the financial pressures experienced by tenants and landlords over recent years," said Bethan Cooke, director at Pegasus Insight (pictured).
"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."
Cooke pointed to the combined pressure of costs and regulation as the context in which the improvement should be read. "Our tenant research also shows that most renters are continuing to meet their housing costs, but many household budgets remain stretched," she said.
"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."
