UK landlord rent arrears fall to record low

Research conducted by Pegasus Insight for Paragon Bank indicates that the proportion of landlords experiencing rent arrears has fallen to a record low. In the second quarter of 2026, 26% of landlords reported rent arrears within the previous 12 months, a decrease from 30% in the first quarter.

Profitability within the sector also showed improvement, with 86% of landlords reporting a profit from letting activities, marking a two percentage point increase from the previous quarter. Average gross rental yields reached 7.02% during the same period.

Supplementary data from UK Finance noted that buy-to-let mortgage arrears of more than three months have declined for nine consecutive quarters. These arrears accounted for 0.52% of outstanding buy-to-let mortgages at the end of the second quarter, down from 0.68% a year prior. While landlords expressed caution regarding the broader economy and regulatory changes such as the Renters’ Rights Act, data suggests the sector remains resilient due to reliable rental income and healthy yields.