Generation Rent criticises the lack of rent caps in the Renters’ Rights Bill
1 year ago | 3 comments
Landlords could see tenants moving in without paying rent
12:05 AM, 22nd January 2025, 1 year ago
67
Real estate firm Knight Frank has issued a stark warning that tenants could move into properties without paying any rent once the Renters’ Rights Bill becomes law.
The government’s bill will prohibit any rent payment before a tenancy agreement is signed, with landlords facing fines for accepting such payments.
The firm’s head of lettings, Gary Hall, said: “These amendments to the Renters’ Rights Bill are bad news for landlords.
“Under the amendments, any payment of rent made before a tenancy agreement is signed will be a prohibited payment.”
Landlord could be fined
Mr Hall continued: “If a landlord invites, encourages, or accepts such a payment, the landlord or their agent could face local authority enforcement action and a fine.
“The big problem with this is often tenants want to move into a rental property quickly, sometimes in a matter of days, and transfer of funds can take three to five days, sometimes more if coming from overseas.
“Tenants will want to be able to make one payment covering rent and deposit as soon as possible to avoid multiple bank charges or the admin of making multiple payments.”
Allow rent at the start of a tenancy
He added: “The Government needs to see sense and allow rent at the start of a tenancy to be paid before a tenancy agreement is signed and before the start date of the tenancy.
“The current framework puts landlords and agents at constant risk of enforcement action for something that is out of their control.
“It is also unfair for a landlord to be at risk of a tenant moving into a property without the first month’s rent paid.”
What the government says
The government’s guide to the Bill explains the ban on advance payments:
The Renters’ Rights Bill will end the practice of landlords demanding large amounts of rent in advance from tenants looking to secure a tenancy.
This unfair practice can encourage prospective tenants to stretch their finances to the limit, preventing them from moving within, or accessing the sector altogether.
Once enacted, the Renters’ Rights Bill will amend the Tenant Fees Act 2019 to prohibit landlords or letting agents from requiring or accepting any payment of rent in advance of the tenancy being entered into.
A landlord will only be able to require up to one month’s rent (or 28 days’ rent for tenancies with rental periods of less than one month) once a tenancy agreement has been signed and before commencement.
The Renters’ Rights Bill will also amend the Housing Act 1988 to provide that, once a tenancy starts, a landlord will be unable to enforce any terms in a tenancy agreement that require rent to be paid in advance of the agreed due date.
This measure will protect prospective tenants from large requests for rent in advance that are beyond their means.
Tags:
housing crisis, Knight Frank, Landlord Tenant Rent Payments, Landlords, Prohibited Rent Advance Payments, Property market, propertymark, Protecting Tenants Financially, rent in advance, renters rights bill, Renters Rights Bill impact, Tenant Fees Act 2019 Amendments, tenants, UK, UK Housing Legislation Changes
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Member Since January 2020 - Comments: 1102 - Articles: 1
12:05 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Jo Westlake at 22/01/2025 – 01:47
We have normally adopted the same procedure but once the new rules are in place the holding deposit will have to be used as part of the tenancy deposit, otherwise it will be rent in advance of signing, which will be prohibited.
Member Since January 2020 - Comments: 1102 - Articles: 1
12:20 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Neil Robb at 22/01/2025 – 08:53
The nrla are where they always are, doing their utmost in association with other representative bodies to protect the interests of their members.
Unfortunately the current government refuses to listen to any reasoned objections to their madcap schemes, not that the previous lot were much better.
Member Since October 2013 - Comments: 1630 - Articles: 3
12:56 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Shahid Az at 22/01/2025 – 07:42
I am considering buying in Dubai. The market shows no signs of letting up. More and more people are moving to the Emirate and rentals are in high demand.
My son is head of marketing for Allsop & Allsop, one of the largest real estate companies in Dubai, and is focusing on the off-plan market. He currently has a very interesting development, which is off-plan, but will be available this May, as opposed to 2 years time. A great opportunity for an immediate and profitable rental income stream.
Member Since June 2023 - Comments: 17
1:35 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Monty Bodkin at 22/01/2025 – 10:36Under English law, a contract is only legally binding if there is consideration; not just signed. This is why some dilapidated properties and debt ridden businesses are sold for a nominal fee (£1)
Member Since December 2023 - Comments: 1575
1:56 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Seething Landlord at 22/01/2025 – 12:05
Read the Bill, Section 9
https://bills.parliament.uk/publications/57759/documents/5623
Member Since September 2022 - Comments: 55
2:31 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Cider Drinker at 22/01/2025 – 13:56
Good luck with that.
Member Since September 2019 - Comments: 37
2:46 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Keith Wellburn at 22/01/2025 – 09:47
Similar situation here. I regularly take overseas workers as tenants such as bankers or oversears students coming over for a year or two. They don’t have suitable referencing and usually pay either 6 months or a year in advance. No idea why the government would want to interfere in such private arrangements. Without either full referencing or advance rent as an alternative, I would have to refuse to take them.
Member Since September 2019 - Comments: 37
2:47 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by T C at 22/01/2025 – 13:35
Rent is consideration, even if it hasn’t been paid when the contract is signed.
Member Since May 2015 - Comments: 2188 - Articles: 2
4:24 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by AnthonyG at 22/01/2025 – 14:46
Sounds like this is going to be a loose all round, low income tenants not being able to access any tenancy, overseas tenants totally excluded. Sad news for our invisible exports.
This government and the last seem to be hell-bent on destroying the whole country.
Member Since February 2018 - Comments: 627
4:47 PM, 22nd January 2025, About 1 year ago
Reply to the comment left by Guy Malone at 22/01/2025 – 08:22
Try hiring a car paid on return, I let to a listed construction company, they paid in advance.