The proportion of landlords experiencing rental arrears has fallen to its lowest level since records began, although larger portfolio landlords remain significantly more exposed.

Some 26% of landlords reported experiencing rental arrears during the past 12 months, according to the latest Landlord Trends research from Pegasus Insight.

The figure continues a six-year decline from the 42% recorded at the peak in 2020. Pegasus Insight said the incidence of arrears had generally eased since the pandemic, despite a slight increase in the first quarter of 2026.

However, arrears remain considerably more common among landlords with larger portfolios. Some 66% of those with 11 or more properties experienced arrears during the past year, compared with 18% of landlords owning between one and 10 properties.

Separate Wave 1 2026 Tenant Trends research from Pegasus Insight, based on 3,000 interviews with private renters, found that 12% of tenants had missed a rental payment during the previous year.

Around nine in 10 tenants described their rent as either manageable or comfortable, although the research also found that a significant minority were having to make difficult choices between paying rent and other essential expenditure.

VOIDS REMAIN COMMON

While arrears have declined, void periods remain a more widespread issue for landlords. Some 41% experienced a void lasting more than seven days during the past 12 months, with affected properties remaining vacant for an average of 66 days.

Again, larger portfolio landlords were more likely to be affected. Some 68% of landlords with 11 or more properties experienced a void, compared with 35% of those with smaller portfolios. HMO operators were also more likely to experience void periods.

Bethan Cooke (pictured), director at Pegasus Insight, said: “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 10 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.”