How landlords can prepare for financial changes in 2026

Key highlights

• From 2026, rolling tenancies and the end of no-fault evictions mean landlords face longer legal processes to regain possession. 

• Landlords incur average rent arrears of over £12,000 nationally and over £19,000 in London per property. 

• The Renters’ Rights Act is set to be rolled out from 1 May 2026. 

The last few years have seen significant changes in residential property ownership. Beyond simply finding a tenant and collecting rent every month, landlords today must manage risks, protect cash flow and prepare for any unexpected situations.  

In terms of evictions, the current County Court system is facing unprecedented delays, leading to difficulties for landlords in accessing and utilising their properties.  

Average rent loss is over £12,000 nationally and over £19,000 in London per property. 
Source: High Court Enforcement Officers Association. 

Landlords are feeling the pressure, primarily due to changes in rules, timelines and financial exposure around tenancies. A 2025 survey from Goodlord, the tenant referencing provider, reports that 42% of UK landlords experienced an increase in rent arrears compared to the previous year. 
This article examines the factors contributing to rent arrears and explores ways to avoid such circumstances, while also explaining how suitable Rent Guarantee and Legal Expenses Insurance can help.

Understanding the rental landscape in 2026

The Renters’ Rights Act is set to be rolled out from 1 May 2026, with extensive reforms to private renting.  

• Section 21 no-fault evictions are no longer applicable. Landlords can only evict a tenant on valid legal grounds, such as significant rent arrears or antisocial behaviour.  

• Under the Renters Rights Act 2026, tenancies will automatically transition to periodic agreements. This eliminates fixed-term tenancies, which are typically set for 6 or 12 months, and removes a predetermined end date. 

• Tenancies will operate on a rolling, open-ended basis until the tenant voluntarily leaves or the landlord provides a valid legal reason to terminate the agreement. This will limit the ability of landlords to easily regain the property, and the formal legal process can be lengthy.  

• Tenants will get stronger protections on rent payments, notice periods and how tenancy relationships operate.  

These changes may result in significant losses for some landlords, especially if they are unfamiliar with court processes and unable to manage months of lost income.  

How rent arrears become problematic over time

Arrears usually begin with a missed payment, followed by partial rent and then nonpayment. By the time landlords can take formal action, they may have already accumulated significant overdue payments.  

Alongside lost rental income, the financial impact may also include legal costs associated with notices, possession proceedings and court delays. For landlords with a smaller portfolio, the loss of rental income can affect mortgage payments and secondary income streams.

Practical tips to reduce your rent arrears risk

It’s never easy to fully predict rent delays. However, some practical measures can be taken to lower the possibility of rent arrears. 

Screen tenants

Take the time to check a tenant’s rental history and their income or employment status. Most issues with nonpayment or delayed payment occur because affordability was not checked right at the outset. 

Keep clear documentation

Collect and organise all records of rent payments, tenancy agreements and communication with tenants. Clear paperwork is always helpful when a conflict of opinion arises and legal intervention is required.

Maintain clear communication

Set expectations from the start and inform your tenant that on-time rent payment is non-negotiable. Come to an agreement before the letting commences, and if a payment is missed in the future, address it straight away.

Stay updated on the law

Understanding the current rules can help you avoid costly mistakes. The NRLA can help you to stay updated on regulations. 

Protecting yourself with Legal Expenses and Rent Guarantee Insurance

With the upcoming changes in the Renters’ Rights Act, the eviction process may become more complex. Landlords can no longer issue a no-fault notice and reclaim their property. Strict notice procedures must be followed, with evidence of consistent arrears, and the possibility of having to defend the case in court.  

Landlords may face delays in eviction, increasing financial risks such as unpaid rent and legal costs. In this regard, Legal Expenses and Rent Guarantee Insurance can help landlords by providing a safety net in the event that a tenant falls behind on payments.  

How Gallagher can help

Rent arrears and eviction difficulties are common issues, and it is important for landlords to understand and follow the proper procedures. Gallagher can assist you in finding suitable Legal Expenses and Rent Guarantee Insurance, providing financial protection against unpaid rent and legal expenses. 

We can help you protect your finances as a property owner and face the future with confidence.  

The sole purpose of this article is to provide information on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited and National Residential Landlords Association, an Introducer Appointed Representative of Arthur J. Gallagher Insurance Brokers Limited, accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein. 

National Residential Landlords Association is an introducer appointed representative of Arthur J. Gallagher Insurance Brokers Limited, which is authorised and regulated by the Financial Conduct Authority. Registered Office: Spectrum Building, 55 Blythswood Street, Glasgow, G2 7AT. Registered in Scotland. Company Number: SC108909.