Three reasons tenants pay late, and how to solve them

What if agents could coach tenants to pay rent more reliably? In this article we share some practical tips to do exactly that.

Arrears are currently at near-record lows. In Q4 2025, 17.0% of tenants were in arrears, just 0.1% above the all-time low achieved in Q2 2025. On average, tenants in arrears also owed a record low 71.3% of monthly rent.

Even so, a more detailed understanding of why arrears can happen can help agents and administrators get those numbers down even further, impressing landlord clients and making commission income more reliable.

When tenants fall behind on rent, it’s usually for one of three reasons:

• Cash flow – the tenant simply doesn’t have enough money to pay.
• Forgetfulness – the tenant has forgotten the rent payment date or the full amount they are supposed to pay.
• Administrative ‘friction’ – sometimes it's difficult to pay rent reliably, even when the tenant is willing and able, like when charges such as the levy or utilities change from month to month.  

Invoice early

Sending the right invoices at the right time promotes better payment behaviour in almost every regard. Rent averages around 30% of tenants’ income, so giving them more notice increases the chances of a timely payment.

The Smart Processing Timeline, developed by our Client Success Team alongside high-performing clients, helps agents time invoicing for maximum impact and efficient rent collection. Find out how it works here.

Change behaviour with communication

It’s not enough to send an invoice (but please, do send them). Agents can also encourage timely payments by staying in touch throughout the entire process. This might include sending reminders when rent becomes overdue and confirming once a payment has been received and applied to the tenant’s account.

When agents fail to communicate regularly or hesitate to escalate the process when needed, they ultimately create more work and complexity for themselves.

Overcoming friction

Invoicing tenants early is best practice for agencies, but it can be complicated when municipality or utility bills arrive late. Often, agents delay sending out the invoice until they can give the tenant a final total. But according to PayProp’s experts, this is a mistake: Agents should send the invoice on the regular date, and then follow up with ad hoc invoices once the levy or utility bills arrive. The subsequent tenant statement should reflect the full total and breakdown.

There can also be banking delays, especially when the tenant and the agency use different banks. This one is also solvable, but only with the right technology. PayProp uniquely enables tenants to make same day payments into the platform no matter which bank they use, as long as they make the transaction before their bank’s cutoff time.