5 ways landlords can reduce the risk of rental arrears

Balancing the buy-to-let books has never been more important. If the money coming in is less than the money going out, there’s trouble and rent arrears? They’re often at the heart of the issue.  

If you own a buy-to-let and have an ‘it’ll never happen to me’ attitude, the latest stats are sobering. Between 2024 and 2025, English landlords were collectively owed more than £470 million in rent arrears, claim Propoly – equal to an average of £2,238 per landlord. 

In Scotland, a poll by SafeDeposits Scotland Charitable Trust found 29% of tenants had experienced difficulties in paying their monthly rent over the past year. And in Wales? There’s a lack of arrears data for Wales but renters there are having to find more money, as Office for National Statistics data revealed Wales’s average rent has recently increased 5.8%.

Thankfully, today’s landlords have a number of tools that help reduce risk and remunerate if the worst does happen. Here are 5 must-consider ways to minimise exposure to arrears:

1. Use the best referencing possible: a landlord’s first line of defence is meticulous referencing. Knowing how much a tenant earns, whether they have a poor credit history or routinely miss rent payments, and that they have job security is paramount. 

2. Insist on a guarantor: if you want extra security, insisting a tenant has a guarantor is a good idea. A guarantor’s job is to pay the rent if the tenant can’t but they too must pass referencing to ensure they have enough money. 

3. Get insured against loss: rent guarantee insurance is a small price to pay for peace-of-mind. A good policy will cover the rent when a tenant defaults so the landlord isn’t out of pocket. Just make sure claims can be made if the tenant is still living in the property.

4. Add a deposit use clause to the agreement: if there are arrears at the end of the tenancy, a landlord can use deposit deductions to cover the shortfall. This can be made simpler if a deposit use clause is added to the tenancy agreement before it is signed.

5. Request rent in advance: rent in advance provides a cash safety net. Landlords in Scotland can currently request their tenant pay 6 months’ rent in advance. In Wales, there is no cap on rent in advance’s value. Landlords in England, however, will be limited to taking one months’ rent in advance from 1st May 2026.

When can you evict if the tenant is in arrears?

Sadly, rent arrears can happen for a number of reasons. If the viability of your buy-to-let is compromised due to late payments or mounting arrears, here’s a quick guide to evicting tenants and regaining possession of your property:

England: from 1st May 2026, all landlords whose rent arrears reach a certain threshold must use Ground 8 of a Section 8 notice when regaining permission. The threshold from 1st May 2026 will increase from 2 months' rent for a monthly tenancy (or 8 weeks' rent for a weekly tenancy), to 3 months' rent for a monthly tenancy (or 13 weeks' rent for a weekly tenancy). 

There are no changes to discretionary Ground 10 (rent arrears of any amount) and discretionary Ground 11 (persistently late rent payments) – both remain at 4 weeks’ notice before a landlord can apply to the court.

Wales: Wales is unaffected by the Renters’ Rights Act. Its Renting Homes (Wales) Act 2016 says landlords who find themselves with rental arrears of two months or greater can start the eviction process using a 14-day notice period. It’s a one-month notice period for non-serious arrears.

Scotland: currently, a landlord can start the process of eviction if the tenant has been in rent arrears for at least 3 months in a row, or there are rent arrears that add up to 6 months’ rent or more. The landlord must give the tenant 28 days’ notice, no matter how long the renter has been in residence. 

When The Housing (Scotland) Act 2025 comes into force, the First-tier Tribunal will have to consider if any evictions should be delayed due to specific circumstances of the tenant, or landlord, rent arrears cases included.

Please contact us if you have any worries about rental payments, arrears and how evictions will be affected after 1stMay 2026.