Rent arrears have always been one of the risks landlords carry. For most of the past decade, the backstop was straightforward: if a tenant stopped paying and couldn’t be reasoned with, a Section 21 notice gave landlords a relatively predictable route to regain possession. That changed on 1 May 2026. With Section 21 now abolished under the Renters’ Rights Act, rent guarantee insurance has moved from a sensible optional extra to something every landlord should be actively considering.
This article explains what rent guarantee insurance is, what a good policy actually covers, why demand has risen sharply since May 2026, and why we at Partridge Homes have recently partnered with Goodlord to make this protection more accessible to the landlords we work with. We also sat down with Paul, our director, to get his honest take on whether he takes it himself.
What Rent Guarantee Insurance Actually Is
Rent guarantee insurance (RGI) is a specialist policy that pays out when a tenant stops paying rent. It is not the same as the loss-of-rent cover sometimes bundled into buildings insurance, which typically only applies when a property is uninhabitable, for example after a fire or flood.
RGI is specifically designed for tenant non-payment. A good policy will cover:
- Monthly rent payments from the point the tenant defaults, up to a specified cap (typically £2,500 to £5,000 per month)
- Legal expenses including solicitor fees, court fees, and bailiff costs, usually up to £50,000 to £100,000
- The full process from first missed payment through to vacant possession
Some policies also cover the cost of evicting squatters and, in certain circumstances, damage caused by a defaulting tenant. The premium is tax-deductible against rental income, which reduces the real cost meaningfully. Combined with legal expenses cover, a policy can cost as little as £100 to £250 per year per property, making it one of the most cost-effective forms of protection available to landlords.
The Scale of the Problem
It is easy to assume rent arrears are something that happens to other landlords. The data suggests otherwise.
An estimated 30% of UK landlords experienced rent arrears at some point during the past year, equating to approximately 846,000 landlords affected nationwide (LegalforLandlords, 2026). The average amount owed per arrears case rose from £1,724 to £2,238 over the same period, and total rent arrears across the sector exceeded £470 million in a single year (LegalforLandlords, 2026).
Even thorough tenant referencing cannot eliminate the risk entirely. Job losses, relationship breakdowns, illness, and changes in personal circumstances can affect tenants who passed every check at the point they moved in. The question is not whether arrears can happen; it is how exposed you are when they do.
Why 1 May 2026 Changed the Calculation
Before 1 May 2026, a landlord facing a non-paying tenant had two routes: negotiate a resolution, or serve a Section 21 notice and begin possession proceedings on a relatively predictable timeline. Section 21 is now gone.
Possession now requires a Section 8 claim through the courts. The mandatory arrears ground, Ground 8, requires three months of arrears at both the date the notice is served and the date of the court hearing, with a minimum four-week notice period before proceedings can begin. Factor in current court backlogs, and a straightforward rent arrears case can realistically take six to twelve months from the first missed payment to the point vacant possession is obtained.
During every one of those months, the rent stops. The mortgage does not.
The financial exposure on a single tenancy, combining lost rent and legal costs, can run to £15,000 to £25,000 in a worst-case scenario. Rent guarantee insurance caps that exposure for a fraction of that cost. That is why demand for RGI has risen sharply since May 2026, and why landlords who previously considered it optional are now treating it as standard.
Partridge Homes and Goodlord: Staying Ahead of the Curve
At Partridge Homes, we have always believed that a letting agent’s job is not simply to find tenants and collect fees. It is to stay ahead of legislative change, reduce risk for the landlords we work with, and use the best available tools to do it properly. That is why we have recently partnered with Goodlord, one of the UK’s most forward-thinking lettings platforms.
Goodlord powers every stage of the lettings process, from referencing and contract generation through to ongoing compliance. For landlords, the practical benefits are significant:
- Referencing: Goodlord uses AI-powered identity verification and advanced fraud detection, backed by a team of referencing specialists. 70% of references are returned within a day (Goodlord, 2026), so landlords are not left waiting while a property sits empty.
- Compliance: Contracts are updated automatically whenever legislation changes, with full time-stamped audit trails kept throughout. In the current regulatory environment, that matters.
- Rent protection: Goodlord’s Rent Protection and Legal Expenses cover is built specifically to support landlords through the post-Section 21 landscape, with policies structured to reflect how possession proceedings now work.
Goodlord’s own research found that 29% of landlords cited compliance as the main reason they use a letting agent in 2026, up from 17% in 2023 (Goodlord, State of the Lettings Industry Report, 2026). That shift reflects exactly what we are seeing in Birmingham and Solihull: landlords want an agent who understands the rules, keeps up with changes, and takes the administrative burden off them. Goodlord helps us do that.
A Q&A with Paul, Director of Partridge Homes
Paul, rent guarantee insurance has been around for years. Why are you talking about it now?
The honest answer is that the risk profile has changed. Before May 2026, if a tenant stopped paying and wouldn’t engage, you had a workable exit route. Now the process is longer, more complex, and more expensive if things go wrong. The numbers have shifted enough that landlords who never previously needed RGI should at least be thinking about it seriously.
Does Goodlord make this easier to access for your landlords?
That’s exactly why we brought them on board. We wanted a platform that could handle referencing, compliance, and rent protection in one place, rather than landlords having to piece it together themselves. Goodlord’s rent protection product is well-structured and competitively priced, and because it sits within the same platform we use to manage the whole tenancy, there are no gaps.
Do you take rent guarantee insurance yourself?
This is the question I get asked most often, and I want to give an honest answer. Over the past ten-plus years, with my own personal property portfolio, I have not taken it. The reason is straightforward: I know exactly how thorough our referencing and tenant selection process is at Partridge Homes. I have seen firsthand how carefully we screen tenants, and that has given me enough confidence to carry the risk myself.
That said, I am now starting to take rent guarantee insurance across my own properties, and it is precisely because of what changed on 1 May 2026. The abolition of Section 21 has extended the timeline and the potential cost of a possession case significantly. The maths has changed. For the premium involved, the peace of mind is worth it, and I would not feel comfortable advising landlords to consider something I was not prepared to do myself.
What would you say to a landlord who thinks they don’t need it because they have good tenants?
That is the same reasoning I used for ten years, and it is not wrong, exactly. Good tenant selection genuinely does reduce your risk. But it does not eliminate it. Circumstances change. People lose jobs, go through divorces, develop health problems. The tenant who was impeccable for three years can, in a fourth year, find themselves unable to pay. The question is not whether your tenants are good people; it is whether you can absorb six to twelve months of lost rent if the worst happens. For most landlords, the honest answer is no.
What to Look for in a Policy
Not all rent guarantee policies are equal. Before taking one out, check:
- The arrears threshold before the policy pays out. Some policies require one month of arrears; others require two. The sooner cover kicks in, the better.
- The monthly cap. Make sure it covers your actual rent, not just a standard figure. If your property lets at £1,800 per month, a £1,500 cap leaves you exposed.
- Legal expenses included. A rent guarantee policy without legal expenses cover leaves you meeting court costs yourself. The two should go together.
- Referencing requirements. Most policies require tenants to have been referenced to a specified standard. Policies taken out through a platform like Goodlord, where referencing is already built in, satisfy this requirement automatically.
- Exclusions. Check whether the policy covers tenants who were in arrears before the policy started, and whether it covers tenancies that were already in difficulty at inception.
The Bottom Line for Birmingham and Solihull Landlords
The rental market across Birmingham and Solihull remains active, with strong tenant demand across both cities. Good tenants are still out there, and rigorous referencing still matters. But the regulatory environment has changed, and the cost of things going wrong has risen. Rent guarantee insurance, at £100 to £250 per year, is not a significant outlay relative to the exposure it covers.
If you are a landlord who has never taken RGI before, May 2026 is a reasonable moment to reconsider. If you are already protected, review your policy to make sure the cover level reflects your current rent and that legal expenses are included.
If you would like to understand how Goodlord’s rent protection works within our lettings service, or want to talk through your options as a landlord in Birmingham or Solihull, the team at Partridge Homes is happy to have that conversation. You can reach us through our contact page. Protecting your rental income is not about expecting the worst; it is about making sure the worst does not derail everything else.
