But although it sounds like the former couple are definitely back together, Lydia has insisted they didn't share the same bed.
The TOWIE stars both appeared on This Morning today and Arg made the slip while chatting about why he was wandering around backstage topless.
He said: "I didn't have time to iron my shirt so I kindly asked a lady to iron it for me. I was in a rush, me and Lydia had a sleepover last night..."
Lydia was, however, quick to point out that her ex-boyfriend had slept on the sofa. She declared: "He snores really badly!"
Earlier today, Lydia and Arg also appeared on Radio 1 and confessed to having a "holiday romance" in Ibiza last month.
The former couple were there with their TOWIE co-stars to film a two-part special for the new series of the reality show and it appears they may have shared a kiss.
But when asked by Eamon Holmes on This Morning whether they are back together, Lydia told him: "We're not official but we're getting on, we're pretty close. I've got to test the water first."
Last month, Arg sparked a police man hunt after he went missing while on his way to the airport - but he was later found in a hotel, after missing his flight and not charging his mobile.
Hinting that this is one of the reasons Lydia has not fully committed to him, Arg explained: "I've had a few things go wrong recently - I need to sort myself out.
"I need to show I can be mature. Lydia has been taking care of me when really I should be the man taking care of her."
Lydia added: "I can't go out with someone who always goes missing. I can't have #PrayForArg trending every week."
Looking forward to the new series of TOWIE? Watch the preview here!