Rent Arrears: Implications Under the Renters’ Rights Act
The Renters’ Rights Act introduces significant changes to the eviction process, particularly concerning rent arrears. Landlords must familiarise themselves with the revised Section 8 grounds for possession, focusing on the mandatory and discretionary grounds, as well as the associated timescales.
Mandatory Ground 8: Serious Rent Arrears
Under the new legislation, landlords can seek possession on the mandatory Ground 8 if:
- The tenant is at least three months’ rent in arrears at both the time the notice is served and at the time of the court hearing.
- The notice period is four weeks, providing tenants with a reasonable timeframe to address the arrears before proceedings commence.
Under current legislation, Ground 8 applies where a tenant is in at least two months’ rent arrears (if rent is paid monthly) or eight weeks’ arrears (if rent is paid weekly). The required notice period is currently just two weeks. This means landlords can act much sooner, and the arrears threshold is lower.
The proposed change under the Renters’ Rights Act therefore represents a significant shift in balance between landlord and tenant rights. By increasing the arrears threshold from two to three months and doubling the notice period from two to four weeks, the government aims to give tenants greater protection against rapid eviction—particularly in cases where arrears might arise from short-term financial difficulties or delays in benefit payments. However, from a landlord’s perspective, this may mean longer periods of unpaid rent and extended timelines before being able to regain possession through the courts.
Discretionary Grounds: Rent Arrears and Persistent Delay
Landlords may also seek possession on discretionary grounds related to rent arrears. These differ from mandatory grounds in that the court has the discretion to decide whether or not to grant possession, based on the circumstances of the case.
The discretionary grounds for rent arrears are as follows –
Ground 10: Any Arrears
This ground applies when the tenant is in rent arrears at the time the notice is served and at the time of the hearing, but the amount owed is below the mandatory threshold required for Ground 8.
Ground 11: Persistent Delays in Paying Rent
This ground covers cases where the tenant has persistently delayed paying rent, even if there are no significant arrears at the time of the hearing. It targets tenants with a pattern of late payment, which may cause ongoing management and cash-flow problems for landlords.
The notice period for these discretionary grounds is four weeks, similar to the mandatory Ground 8.
The Reality of Timeframes
While the Renters’ Rights Act aims to create a fairer system for both landlords and tenants, the practical reality of regaining possession through the courts often involves significant delays. Even where landlords meet the legal criteria under Ground 8 (mandatory arrears) or pursue possession under discretionary grounds, the process can take several months to complete.
According to the latest Ministry of Justice figures, the median average time from claim to landlord repossession has increased to 27.9 weeks, up from 25.4 weeks in the same period in 2024. This means that, on average, landlords are now waiting nearly seven months from the date they submit a possession claim to the point at which they can actually recover their property.
These extended timelines can create considerable financial pressure, particularly in cases involving ongoing rent arrears. Landlords not only face the loss of rental income during this period but also continue to incur costs such as mortgage payments, insurance, and maintenance. For smaller landlords—who make up the majority of the private rented sector—such delays can have a significant impact on cash flow and financial security.
This growing backlog highlights why many landlords are turning to rent guarantee insurance as a means of protection. These policies can cover missed rent payments and legal costs associated with eviction proceedings, helping to mitigate the financial impact of lengthy possession processes.
Protecting Landlords: The Role of Rent Guarantee Insurance
Given the extended timelines and potential financial risks associated with rent arrears, more and more landlords are considering Rent Guarantee Insurance as a protective measure.
Homemaker Properties helps landlords protect against the financial risks of rent arrears and lengthy possession proceedings. They offer Rent Guarantee and Legal Protection as part of their Tenancy Management service, provided through trusted partner Let Alliance.
These policies are designed to give landlords complete peace of mind by ensuring consistent rental income, even when tenants fall into arrears or legal action becomes necessary. Cover includes:
- Rent paid for up to 15 months or until vacant possession is obtained, whichever comes first (up to a maximum of £50,000)
- Up to three months’ rental payments at 75% of the monthly rent following vacant possession, helping to cover void periods
- Rents up to £3,500 per month, with higher values considered upon request
- Comprehensive legal protection, covering breaches of tenancy agreements such as non-payment of rent or failure to vacate after a notice expires
Looking Ahead
The Renters’ Rights Act introduces significant changes to the eviction process, particularly concerning rent arrears. Landlords must adapt to these new regulations by understanding the revised grounds and considering protective measures like Rent Guarantee Insurance. By staying informed and proactive, landlords can navigate these changes effectively and maintain a stable rental business.