In this blog:
- Why do rent arrears carry more risk for owners than they used to?
- What do arrears actually look like for owners in practice?
- How has the Renters' Rights Act increased the exposure on your rental income?
- Is rent protection insurance worth it, and what does good management add on top?
For many owners, rent protection used to feel like an optional extra. Sensible, but not always necessary. That has changed.
Over the past few years the risk of letting property has shifted in ways that are easy to underestimate until something goes wrong. Rent arrears are no longer a short-term inconvenience. They can now become a prolonged financial and emotional strain for owners, and the rules that came into force on 1 May 2026 from the Renters Rights Act have made the timelines longer still.
If rent protection insurance is already in place for your property, there is nothing you need to do. If it is not, this article explains why it is now worth a closer look, and what good management adds on top of it.
Why rent arrears now carry greater risk for owners
In over fifteen years of lettings, the impact of rent arrears has never been as significant as it is now. The reason is not that residents are less reliable than they used to be. It is that the system designed to resolve problems no longer moves at a pace that protects owners.
There used to be a straightforward route. When a resident fell into serious arrears, it was usually possible to regain possession within a reasonable timeframe. That route has gone. Section 21, the notice that did not require a specific legal reason, has been abolished. Section 8, which requires an owner to prove a specific legal ground in court, is now the only way to recover possession, and the courts are busy. Once a tenancy starts to go off track, owners can be exposed for far longer than they expect.
That exposure is not only financial. It is stressful and draining, particularly when the situation is outside your control.
How the Renters' Rights Act increases the exposure
The Renters' Rights Act, which came into force on 1 May 2026, extends these timelines further.
Under the new rules, an owner cannot apply to court for mandatory possession on rent arrears grounds until a resident is at least three months in arrears. That is three months of lost rent before any legal process can begin. A notice period of at least four weeks then applies, followed by court delays that can run for many more months. The arrears must still meet the three-month threshold at the hearing itself, not only when notice is served, so a partial payment that dips the balance below the line can send the process back to the start.
In practical terms, it is now realistic for an owner to be without full rental income for eight to ten months, or longer, once arrears arise. That is a significant amount for any household or portfolio to absorb.
Why rent protection insurance is worth considering
Against this backdrop, rent protection insurance has moved from a nice to have to a proportionate safeguard.
With Paramount, rent protection starts from £350 a year and covers unpaid rent alongside the associated legal costs. It is designed to give you certainty while matters are resolved, rather than leaving you exposed to long periods without income. It does not prevent arrears from happening. What it does is protect your income while the situation is worked through, and take the financial pressure off during what is already a difficult period. For many owners, that peace of mind alone makes a real difference.
What good management adds on top
Insurance protects your income when something goes wrong. Good management reduces the chance of it going wrong in the first place, and the two work best together.
The properties that run into the most serious arrears are rarely the ones with the most difficult residents. They are the ones where small problems were allowed to build quietly. A maintenance concern raised and never answered. An overdue inspection and a developing issue nobody flagged. A rent review handled informally rather than through the correct process.
This is where full management earns its place. Our AI diagnostic tools take resident reports at any hour, every day of the week, so a small fault is dealt with before it becomes a reason for a good resident to leave. After every inspection you receive a video review of your property and a forward-looking maintenance road map, so you see what needs attention now and what to plan for, rather than finding out through a problem. And when a rent review comes around, we contact you three to four months ahead, agree a considered, well-evidenced figure, and handle the conversation with the resident so that a fair increase is accepted rather than contested. A resident who feels properly looked after stays longer and pays reliably, and that, more than anything, is what protects your income over time.
Insurance is the backstop. Management is what keeps you from needing it.
Making an informed decision about your rental income
Our role is not to tell you what to do. It is to make sure you are informed, prepared and protected, especially as regulation and court timelines continue to change.
If you would like to add rent protection insurance to your tenancy, or talk through whether it is right for your situation and whether your current management is giving you the protection it should, our team is always happy to guide you through the options.
Book a review call here. No obligation and no sales pitch. Just a clear conversation about your property and how best to protect the income it produces.
