What is behind the fall in rent arrears?

“Year on year, our spend on our homes is more, which means that things like service charge increases go up”, says Neal Ackcral, chief operating officer at housing association The Hyde Group, “and obviously the rent is a huge bill for our customers as well.”

The cost of living crisis has only intensified these increases, according to Mr Ackcral, while a significant migration of residents from housing benefit to Universal Credit (UC) has posed its own challenges. 

As the struggles stacked up, Hyde made a critical decision – to move towards an early intervention system to tackle rent arrears, driven by data.

“We have really good data now in terms of all of our rent,” Mr Ackcral says. “So we can actually see how people pay their rent, if they modify their payments to us, if they go into arrears.”

Mr Ackcral says these data insights allow Hyde to act quickly when someone is heading into rent trouble. Staff will advise customers on matters including switching utilities providers and tariffs, accessing benefits and grants, and broader financial management. 

Hyde has seen rent and service charge arrears fall across all tenures for three years in a row, despite rent and service charge increases, and evictions are at their lowest in three years. 

A cause for optimism

The reductions are indicative of a promising trend in social housing. According to data published by social housing data specialists Housemark, rent arrears across the sector were 14% lower in January 2026 than in January 2025, despite the ongoing cost of living crisis and other external pressures. But what is driving this trend – and can it be sustained?

Nick Budlender, policy officer at the National Housing Federation (NHF), says that in recent years there has been a notable shift away from “a purely enforcement approach”, towards “specialist teams that focus on income management” instead.

These specialists are allowing housing associations to focus more on decreasing or avoiding arrears, Mr Budlender says, and their interventions are made more effective by improvements in data quality, systems and communication with residents.

The policy officer says the change is also part of a wider general shift over the past decade, with landlords prioritising better engagement with residents and a focus on tenancy sustainment.

However, he says the latter is increasingly challenging for social landlords due to a variety of external pressures. 

“It’s a tough environment, basically, for the people working on the finance side to navigate,” Mr Budlender says, “because you have this imperative to invest in new homes.

“You also have a very big moral and regulatory imperative to invest in existing homes, and then you have a tenant group who are increasingly squeezed by the cost of living.” 

Flexibility for residents

Despite these financial pressures, Hyde has made it a priority to deliver support not just quickly, but also compassionately.

“It’s really important that we’re seen as a friendly, helpful face, rather than someone who’s aggressively trying to get the rent straight away,” Mr Ackcral says. Hyde staff will try to advise residents on how they can make achievable changes – but will never explicitly tell their customers what to do, he explains.

Flexibility is also essential, Mr Ackcral says, which is why Hyde now allows residents to pay their rent via an app, All Pay, at the Post Office, by direct debit or over the phone, depending on their preferences. The number of residents on payment plans has also increased in the past three years. 

“Every pound counts for our customers, because it’s a tough time”

“We’ve realised that [giving residents] the ability to pay in different ways is really important,” he says. “It’s trying to make the actual payment of rent as easy as possible, making sure that it works the best for them.”  

Hyde is also part of Housing Perks, a UK-wide scheme where residents can get money off their rent every time they buy eligible items at major supermarkets. 

The savings are small, but they add up, Mr Ackcral explains. “Every pound counts for our customers, because it’s a tough time,” he says. 

Automation and early intervention

Holly Edwards, customer experience director at housing association Stonewater, which has seen rent arrears fall from 5.47% in 2022-23 to 3.63% in 2025-26, says the use of automation has been “fundamental” to the change. 

Using a product called Caseload Manager, the housing association can group and filter its 40,000 residents to prioritise different interventions for different levels of need.  

A simple automated reminder will be enough for some customers, Ms Edwards explains, for example if a direct debit has dropped due to an error or a technical problem. This automation then frees up capacity for income officers to focus on the customers who need more intensive support. 

Early intervention is crucial, Ms Edwards says. “If we don’t get to talk with [residents] early on about the debt, then once you get maybe two, three months behind in debt then it becomes so entrenched, it’s much harder to come back from,” she explains.

Commonly, the debt is a result of a life change, such as someone losing their job or getting caught up in the benefit system, according to the customer experience director. 

“Very often, [the reason] why customers actually haven’t paid is because their claims have gone wrong,” Ms Edwards says. “They’re lost in the system. They’re stuck between multiple bodies, and actually, they need us to invest some time to support them.” 

Fairness and transparency

Ms Edwards describes Stonewater’s approach as “firm but fair”, with transparent support offers, clear expectations for both sides, and a focus on supporting residents to become debt-free in a manageable way, within a defined time period. 

“We’re never going to hold judgement,” she says. “We’re always here to support you [the residents], but actually you need to be speaking to us.”

Partnership work is an equally essential part of Stonewater’s tenancy support efforts.

The housing association’s Money Matters programme, delivered by social housing charity the Longleigh Foundation, provides short-term “heating and eating” grants for residents in crisis.

“Very often, [the reason] why customers actually haven’t paid is because their claims have gone wrong. They’re lost in the system”

To support residents who have debts unrelated to housing, Stonewater also works with non-profit Clean Slate and debt charity Step Change, which offer specialist tools such as individual voluntary arrangements to help repay debt over a specified period of time, and charity Kaleidoscope Plus Group, which offers specialist mental health support relating to money and debt. 

For Ms Edwards, the most important thing is “giving customers control”, and moving away from chasing payments. 

As the cost of living crisis lingers, inflation begins to creep up once again in the UK, and speculation mounts about whether ongoing conflicts in Iran and across the Middle East will unleash another wave of price hikes, budgetary pressures for both tenants and housing associations could intensify over the coming months. 

According to Mr Budlender, it is “still too early to say definitively” whether the trend of reduced rent arrears will continue.

“We of course hope that arrears continue to decline and that the work that housing associations do to sustain tenancies continues to bear fruit,” he says. “But more evidence will be required to understand the long-term trends with certainty.”

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