Is there a future market for fully paid in advance 6 month ASTs?

Is there a future market for fully paid in advance 6 month ASTs?

by Readers Question

Guest Author

11:44 AM, 7th December 2022, About 2 years ago 6

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Hello, As we’ve now entered a tougher period for the prospect of increased rent arrears, what do fellow members feel about stipulating that all enquirers, for example to a self managing platform like Openrent, are to have the necessary resources to put the landlord into a positive cashflow position in advance?

Then repeated six monthly on new ASTs.

We are constantly hearing about massive competition for property, albeit a little more subdued during the last few months.

Obviously there are numerous instances where this won’t work, due mainly to affordability.

Maybe I’m overlooking a number of regulations meaning you can’t make such a requirement, although I don’t believe it’s the case, so perhaps you can educate me on this.

The tenant could maybe fund it by taking out a personal loan, a private loan, using savings, or asking family such as parents to contribute or lend.

It’s not that uncommon with commercial FRIs for inexperienced tenants to require year one of a five year lease upfront.

Would it not be a way for landlords to fight back a little more control of their own property?

Thank you,


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The Forever Tenant

14:25 PM, 7th December 2022, About 2 years ago

An interesting thought, but could be awkward. You would certainly be narrowing down the pool of applicants that you would be getting. I don't believe that there is any legal situation that would prevent this from occurring.

To use myself as an example, if you were to ask for 6 months rent I would need roughly £6,500 to do so. Now myself, I can actually afford that. I have that in savings so it could be done. I am however in the minority. Most renters do not have savings over £1,000, if at all.

If I were to get a loan as suggested then each month not only would I have to put away enough month to cover the next 6 month lump sum, but also now pay the original loan as well. Based on the rates I just looked at, that would be a payment of between £124 to £557 a month, based on 5 and 1 year loans. You've just made your place even less affordable to people.

I could understand taking the 6 months up front, but month to month after that. It would allow the tenant the opportunity to pay down any loan much more quickly and thus incurring less interest.

Depending on where you are based, it might be something that could work, but you would be putting a lot of additional strain on the tenant.

Amanda mochrie

14:43 PM, 7th December 2022, About 2 years ago

Reply to the comment left by The Forever Tenant at 07/12/2022 - 14:25
I have done this with foreign students and worked well. If their parents could afford the uni fees this didn’t seem to be a problem!

Arthur Cotton

14:46 PM, 7th December 2022, About 2 years ago

So basically a bit like a mortgage then.

Utter madness


19:28 PM, 7th December 2022, About 2 years ago

You can also increase rent slightly to cover for rent insurance premium.

David Judd

13:26 PM, 9th December 2022, About 2 years ago

I ask for 6 months up front for all foreign applicants, and there hasnt been any issue. Most students get a grant so have the money, and international students have no problem with paying in advance, most ask if they pay in advance can they have a discount. Depends where your property is, and what you provide


15:43 PM, 10th December 2022, About 2 years ago

During 2022 I purchased 15 BTL properties in Wales.
Next year I will sell them all, as the Welsh government has it impossible for even quality landlords such as myself, to assert sufficient control over their properties. I can easily see hundreds of other landlords making a similar decision. I fear the likely reaction to this, as the consequence will be higher rents, will be severe rent controls, leading to even less PRS availability. When will governments learn that the PRS is good? We are not the enemy.

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