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Category: property market

The second quarter (Q2) of 2025 has seen some uplifting trends relating to deposits and rent arrears, challenging some of the popular narratives about landlord-tenant relations.

Deposits distributed fairly

Among pro-tenant organisations, there is a common assumption that private landlords unfairly withhold deposits without justification. 

However, new research into the private rental sector (PRS) pushes back against this misconception.

mydeposits is one of the UK’s government-authorised tenancy deposit protection providers.

Focusing on three government-backed deposit schemes, mydeposit released statistics revealing how many deposits are returned to renters after their tenancies expire.

The stats show that in 90% of tenancies processed through an insurance-backed scheme and over 80% in a custodial scheme, tenants received deposits back, either in full or in smaller portions. 

Landlords, on the other hand, only receive the full amount of the claimed deposit in less than 20% of cases. 7% of these are through insurance scheme disputes. This data indicates that tenants are generally more likely to receive their deposits back. 

Decline in rent arrears

Fewer tenants are building up rent arrears as well, according to software company Reposit. Q2 2025 saw an average drop of 20% from Q1, from £2,237 to £1,861, across all property sectors. 

For buy to let properties specifically, the number of arrears dropped by 5% to 11,270. 4,100 of these were in the lightest arrears category.  

Something to consider with this report is that rental price growth has also slowed since 2024, which may partially explain the drop in arrears. 

Data from the Office for National Statistics (ONS) showed that rents were increasing at a rate of 9%. However, April 2025 saw growth drop to 7.4%. The month of May subsequently saw it drop again to 7%. 

Regardless, arrears going down is always optimistic news for landlords. It is important to note that tenants with significant rent arrears will still be vulnerable to eviction via Section 8 notices after the Renters’ Rights Bill passes into law.