Repayment Agreements - in theory, they offer a fair and ethical way to recover arrears while supporting tenants in financial distress; in reality they are all too often an underperforming and unaccountable tool that cause more harm than good.
When we began researching repayment agreements - assessing their effectiveness and exploring ways to improve efficiency - we expected to find flaws. What we discovered, however, were systemic failures far beyond what we had anticipated.
Shockingly, around 25-50% of all arrears are tied up in Agreements, yet 90% of these Agreements collapse within three to six months. Even more alarming is the fact that most social landlords we studied lacked systems to track why, when, or where these Agreements failed. This blind spot means many Agreements are set up to fail from the outset, while systemic underreporting masks the true scale of the problem.
It’s clear that current systems must change. That’s why we’ve developed both a solution and a roadmap. Our new whitepaper redefines the potential of Agreements, while our purpose-built Agreements Manager tool fills the critical technology gap, finally enabling landlords to manage agreements effectively, transparently, and at scale
This blog, along with two follow-up pieces, will dissect the current challenges, explore actionable improvements, and introduce a practical framework to help landlords seize these opportunities. Or, if you’re short on time, you can read our condensed summary blog here.
But first, let’s confront the core question of why Agreements keep failing.
The role Agreements play today
Repayment Agreements offer a critical tool for ethical income management and ensuring debt recovery is both manageable and sustainable. It’s no surprise they’ve become near-universal practice across the sector – though implementation varies (from ‘Agreements’ to ‘Arrangements’ and beyond).
While repayment agreements have long been essential, today's perfect storm, including the likes of the cost-of-living crisis and issues related to Universal Credit rollout, has made them indispensable. Indeed, the recent Holding on to Home* project paints a stark picture; while 9% of tenants are already in arrears, a staggering 70% are teetering on the edge, struggling to meet rent payments.
Agreements work so well in theory because they address both psychological and practical needs for all parties. For tenants, they transform arrears from a crisis into manageable steps, restoring agency and dignity in the debt recovery process. For landlords, they shift arrears management from transactional collections to relationship-building, creating long-term stability rather than short-term fixes.
The challenges in the way
However, in practice, Agreements are plagued by high failure rates and systemic inefficiencies. Part of the issue is that social landlords face unique pressures to treat tenants with care and empathy, limiting the tools available to maximise recovered debt.
Compounding this challenge are the limitations of existing systems and processes, as well as the sheer volume of cases income officers must manage. In fact, the Housing Management Systems (HMS) often relied upon to track and manage Agreements are simply not fit for purpose, as they weren’t designed for the complexities they involve.
Current HMS platforms deliver neither accuracy nor intelligence, misclassifying cases (creating false positives/negatives) and depriving income officers of critical decision-making data. The result is that Agreements built to fail with unsustainable repayment terms set without proper assessment, then left to spiral without intervention.
For officers managing hundreds of cases, these systemic flaws do more than simply hinder effectiveness, they actively worsen arrears situations. What was designed as a solution too often becomes the problem.
To give just one example, without the ability to tailor agreements to individual circumstances, landlords can unintentionally accelerate arrears. As the Holding on to Home project explains, when repayment deductions exceed realistic capacities, they compound rather than solve tenant debt.
Further, when Agreements fail to foster genuine engagement, they inevitably slide down tenants' priority lists, competing against aggressive private collectors.
Through our research, we recognised both the necessity and the opportunity for Agreements to work better. In our next blog, we’ll outline the key leverage points we identified that are capable of transforming Agreements from failing systems into powerful tools for sustainable tenant engagement and arrears recovery.
*https://holdingontohome.org/