Despite economic uncertainty and a housing crisis, rent arrears appear to be stabilising or even improving in some areas. According to the government’s quarterly survey, the mean arrears rate dropped by 0.2 per cent between Q3 and Q4 2024.
Those 2024 figures reveal just how precarious the situation has become, with an average of 4,426 housing units per local authority in arrears (March 2014), up 17 per cent from 3,733 in 2019, with the average value of those arrears up by 70 per cent during the same period, reaching £3.1 million.
These numbers reflect a deepening affordability crisis, with stretched tenants and constrained housing providers struggling to stay afloat, but there are signs that the 2025 figures will show a rare moment of relief.
At first glance, this might appear to be good news, but on closer inspection a more troubling reality emerges.
There’s growing evidence that tenants are staying up to date with rent payments not because they’re financially secure but because the fear of eviction in a tight and unforgiving housing market is driving people to prioritise their rent above all else. For example, the charity Shelter’s latest research shows that one in three low-income renters are skipping meals or going without heating to keep up their rent.
For housing providers, who manage more than 60 per cent of the social-rented homes in the UK, this signals a complex and delicate moment in time. While fewer arrears might reduce the administrative burden, they also risk masking deeper vulnerabilities. As a sector, we must resist the temptation to assume that payment equals wellbeing. Instead, it’s time to ask a harder question: how can we predict and prevent financial strain before it reaches crisis point?
From reactive cycles to proactive care
The traditional rent collection method is fundamentally out of sync with how people live and earn, with many tenants relying on irregular income, zero-hour contracts or shift work. Analysis from the National Institute of Economic & Social Research emphasises that unstable work patterns drive income volatility, making rent cycles difficult to predict. As a result, paydays rarely line up with rigid rent cycles and one unexpected bill or missed payment can trigger a chain reaction of stress, disengagement and debt.
For housing providers, each late-payment case kicks off a manual, time-consuming process of chasing, reconciliation and escalation. It’s an expensive cycle that drains resources and puts frontline teams on the back foot by forcing them to react to problems rather than work proactively to prevent them. This reactive model also leaves tenants unsupported until it’s too late, rather than getting ahead of the challenge with timely help.
This is where AI-powered income forecasting has the potential to change things. Rather than waiting for arrears to happen, these systems analyse real-time data, past behaviour and wider economic indicators to predict payment risks before they happen. It’s not about removing the human aspect; it’s about enhancing it with foresight.
With this predictive capability, housing providers can identify which tenants are likely to struggle and when, often weeks or even months in advance. This kind of invaluable information then allows housing providers to engage sensitively with their tenants, tailoring support to individual needs and offering flexible payment options before arrears get out of control.
By replacing the blunt, one-size-fits-all approach with personalised, timely interventions, AI could enable a new kind of relationship to develop between tenants and their housing providers, and between tenants and their payments – one built on support, trust and long-term stability.
Empowering action through Evo
At The Access Group, we’re developing our own AI offering, in active collaboration with the market. This vision will be realised through Evo, our AI-enabled platform designed specifically to meet the real-world needs of business sectors under increasing pressures. And not just a processor – Evo is a strategic partner in efficient and long-term sustainability.
This kind of capability could be transformative. By harnessing real-time data to forecast income volatility and payment risk, it will allow housing providers to automate their outreach, suggest flexible (and realistic) plans and trigger alerts when interventions are needed.
We know housing provider’s income teams are stretched; many are thinly spread across growing workloads, rising tenant needs and administrative burdens. Instead of chasing payments and managing spreadsheets, income teams could redirect their focus towards meaningful, human-centric work.
By automating routine tasks and predicting the exceptional cases, AI-enhanced systems such as Evo can give back time to the people who need it most.
At the same time, these capabilities empower housing providers to plan with confidence. With clearer visibility into their cashflow trends, arrears hotspots and long-term affordability, housing providers can make smarter budgeting, investment and service-delivery decisions. This isn’t just a good use of technology, it’s governance with resilience.
Building financial resilience
Social housing is currently navigating a high-wire – protecting tenants from rising living costs while maintaining financial stability under ever-constrained budgets. Funding cuts and high inflation have created a budget crunch at the worst possible time, just as the UK’s homelessness crisis worsens.
When used responsibly, AI-powered income forecasting offers a new way to balance this equation. These systems give housing providers a proactive toolkit to support tenants early, reduce arrears before they build up and avoid the emotional toll of late-stage debt interventions.
Not only will this help with operational efficiency, it will also build tenants’ trust. When people feel understood and supported, and not just asked to hand over their money, they’re more likely to engage early, communicate openly and seek help before their problems get out of control.
In today’s environment, this engagement is more important than ever. Housing providers support some of the UK’s most vulnerable communities, and this approach can build both operational resilience and tenants’ trust.
After all, tenants may be keeping up with their rent today, but for many of them it’s coming at a personal cost. Technology can help illuminate what the numbers don’t show on their own; a paid bill doesn’t necessarily mean a person is coping, it might mean that they’re choosing rent over heating or skipping meals to keep a roof over their head.
AI gives all housing providers the ability to spot these warning signs and act accordingly. In doing so, the sector moves closer to what social housing was always meant to be – not just a place to live, but a foundation for wellbeing.
This is the future that Evo will help to build. Not a world where payments are just collected but one where people are truly supported.
Alex Common is the divisional product and engineering director at Access PaySuite, part of The Access Group.
