Managing rent arrears effectively

Rent arrears is rare in the private rented sector but some tenants may find it harder to keep up with their rent than others. Particularly if they suddenly lose a job without warning.  If this happens there are practical steps both landlords and tenants can take to work through it together.

Where possible, the best outcome for everyone is to work together towards a solution that allows the tenancy to continue. For tenants, it means staying in their home without the threat of legal action. For landlords, it improves the likelihood that arrears will be recovered.

This guide is here to help both landlords and tenants find a constructive path that gives both parties confidence that the arrears can be managed and eventually repaid.

Starting that conversation can ease the stress significantly and open the door to practical support. During the coronavirus pandemic, the NRLA found that 90% of private rented sector landlords offered some form of financial assistance when tenants asked for help.

How much a landlord is able to help will depend on their own financial position. But where the difficulty is temporary, working together is almost always the better option. It helps prevent arrears from building up and allows both parties to avoid the cost and stress of court proceedings or reletting.

Tenants should get in touch with their landlord by email or phone, explain their situation clearly and ask what support might be available to help manage the immediate shortfall.

However, many will be anxious about raising it and may not do this. A compassionate, proactive approach can reduce that anxiety, build trust and help both parties commit to a shared plan for managing any arrears and sustaining the tenancy over the long term.

At every stage of managing arrears, it is important for both landlords and tenants to keep clear records. Good documentation means everyone understands what has been agreed, and gives both parties a reliable reference point if questions arise later, certainty for both parties, and clear instructions on what everyone needs to do to stick to the arrangement.

It also means the landlord can demonstrate the steps they have taken to support their tenant, should mediation or court action ever become necessary.

Where tenants prefer to communicate by phone or text, landlords should follow up each conversation with a written summary by letter or email. This summary should note that the tenant is welcome to raise any corrections or disagreements within a reasonable timeframe — usually seven to 14 days.

Once a repayment plan is in place, landlords should send regular, clear rent statements so tenants can easily track their progress and understand what remains outstanding.

Once both parties are in open communication, there are several ways landlords can help to sustain the tenancy. Including direct financial support or by helping tenants access assistance from the Government or their local authority.

Remember, whatever is agreed, always record it in writing.

Financial support from the landlord

Where a tenant has asked for support and the landlord is in a position to help, there are a couple of approaches the landlord could consider.

Deducting from the deposit

For short term, temporary arrears, both parties may agree that any outstanding arrears will be deducted from the deposit at the end of the tenancy. Landlords should be aware, however, that this means the deposit would no longer be available to cover any property damage.

Deferring payment entirely

In some circumstances, the most practical option may be to agree to defer rent entirely for a period, with full payment to follow once the tenant’s finances allow. This is particularly relevant for tenants waiting for a Universal Credit claim to be processed, which can take several weeks.

The rent remains technically due during this time. Landlords can acknowledge this clearly and simply confirm in writing that they will expect payment once the relevant claim or grant comes through.

Both parties should keep in regular contact during this period, particularly if there are delays or if the tenant needs guidance on their welfare application.

As above, both parties may also agree that any outstanding arrears will be deducted from the deposit at the end of the tenancy, with the tenant’s agreement.

Rent Reductions

In the past, it was quite common to offer temporary rent reductions where tenants faced difficulties. However, it is best avoided from 1st May 2026, as the Renters’ Rights Act could prevent you from restoring the rent to its previous level for up to a year. This is because rent can only increase from one rent period to another after serving a Section 13 notice and giving two months notice – something that can only be done once per year.

Offering support with welfare applications to tenants

If a tenant’s circumstances have changed and their income has fallen, they may need to make a Universal Credit (UC) claim.

Many tenants in the private rented sector will have no prior experience of making a Universal Credit claim and may feel uncertain about the process or unsure of what they are entitled to. This is entirely normal, and practical support can make a real difference.

When arrears arise, landlords can help by getting in touch to understand what has changed and how long the difficulty is likely to last. That conversation can help identify what support the tenant may be entitled to and, where possible, form the basis of a reasonable payment plan.

Advances on UC payments

Universal Credit is paid in arrears, seven days after the end of each assessment period. For new claimants, this typically means waiting around five weeks from the date of the initial claim before the first payment arrives. For tenants without savings, this wait can make it very difficult to keep up with bills, including rent.

Tenants can, however, request an advance payment to help bridge this gap. The advance is then repaid gradually from future Universal Credit payments.

To request an advance, tenants can apply by:

• speaking to their Jobcentre Plus work coach
• applying via their online account
• calling the Universal Credit helpline

Budgeting

When income falls, the first priority is to identify what spending is essential and what can be reduced. Cutting back on non-essential outgoings can free up funds for the things that matter most like utilities, food, council tax and rent.

With the rising cost of essentials, this will not always be straightforward but it is still a worthwhile exercise. Landlords should approach the topic with empathy and an awareness of the pressures their tenants are facing.

A budget planner is one of the most practical tools available. Many tenants will already use one, but for those who do not, debt advice providers offer free templates to get started:

https://www.citizensadvice.org.uk/debt-and-money/budgeting/budgeting/work-out-your-budget/

https://www.moneysavingexpert.com/banking/Budget-planning/

Building a budget takes time and requires accurate spending records — but the effort pays off. It reduces the stress of financial uncertainty and, once things improve, provides a solid foundation for a realistic repayment plan that can help tenants clear their debt more quickly.

Ideally, tenants should gather at least three months of bank and credit card statements, along with receipts for regular spending. Comparing usual monthly outgoings against current income helps identify where savings can be made. The goal is to avoid a monthly deficit wherever possible by cutting non-essential spending so that the reduced income can cover the essentials. Tenants should try to keep arrears below the two-month mark wherever possible.

Once the budget is complete, tenants should share a copy with their landlord if they are unable to pay in full. There is no obligation to provide bank statements or receipts but having them to hand may be useful later. A well-prepared budget demonstrates good faith, helps both parties understand the situation clearly and shows that the tenant is doing everything reasonably possible to meet their obligations.

Agreeing a repayment plan

With a completed budget in place, both parties can agree a realistic repayment plan based on what the tenant can genuinely afford after covering essential costs. The plan should set out a clear weekly payment amount and ideally be signed by both parties as a record of their commitment to it.

The timeframe for repayment will depend on what is left in the tenant’s budget once essential outgoings like rent, food and utilities are accounted for.

For example, a tenant who is temporarily out of work may build up some arrears, but once they return to employment and budget carefully, they may be in a position to clear those arrears relatively quickly.

Where the financial pressure is longer-term, the repayment plan will naturally need to extend over a longer period, as less money will be available beyond essential spending each month.

In both cases, landlords should work constructively with their tenants to agree a plan that is genuinely affordable. A repayment amount that is either too high or unrealistically low is unlikely to work for either party and risks undermining the goodwill needed to find a lasting solution.

The shared goal should always be to sustain the tenancy over the long term. Arrears are relatively rare in the private rented sector — but when they do occur, recovery is far more likely if the tenant remains in the property. A sustainable, mutually agreed repayment plan gives the landlord the best chance of recovering lost income and avoids the cost and disruption of court action.

Breathing Space Debt Moratoriums

Since 4th May 2021, tenants in unsustainable debt have been able to apply for a breathing space debt moratorium by speaking with a qualified debt adviser.

If approved, creditors are prevented from making contact regarding the debt or taking any enforcement action for 60 days in most circumstances. Interest on existing debts is also frozen during this time.

During this period, the tenant works with their debt adviser to put an appropriate repayment plan in place. As a landlord, you should not contact your tenant directly about the debt during a breathing space. You can, however, discuss a repayment arrangement with the debt adviser, who will then liaise with your tenant on your behalf.

For a fuller explanation, please refer to our dedicated guide on breathing space debt moratoriums.

Mediation

This guidance is built on the principle that landlords and tenants working together in good faith can reach a fair and workable arrangement. There will, however, be occasions when agreement cannot be reached through direct communication alone.

In those cases, a mediation service may be worth exploring.

Mediation can help both parties reach a binding agreement with the support of a neutral third party. That said, it is in everyone’s interest to resolve matters directly wherever possible, before reaching this stage.