Housing Minister dismisses landlord exodus amid concerns of shift to holiday lets
1 year ago | 14 comments
Renters’ Rights Bill could prohibit advance rent payments
12:01 AM, 29th November 2024, 1 year ago
25
The Labour government is considering banning landlords from accepting advance rent payments from tenants.
During a question to Housing Minister Matthew Pennycook, Dr Simon Opher, Labour MP for Stroud, asked whether the Renters’ Rights Bill would prohibit landlords from accepting one month’s rent in advance.
Many landlords and letting agents request tenants to pay the first one or two months’ rent upfront, which is perfectly legal, as a form of financial security before tenants move in.
Demanding large amounts of rent in advance must be prohibited
Mr Pennycook said: “The government recognise that demands for extortionate rent in advance place a considerable financial strain on tenants and can exclude certain groups from renting altogether.
“We are very clear that the practice of landlords demanding large amounts of rent in advance must be prohibited.”
Mr Pennycook adds: “Although it might be argued that the interaction of the new rent periods in clause 1 of the Renters’ Rights Bill, which are a month or 28 days, and the existing provisions of the Tenant Fees Act 2019, relating to prohibited payments, provide a measure of protection against requests for large amounts of advance rent, we believe there is a strong case for putting this matter beyond doubt.
“The government is therefore giving careful consideration as to how best that might be achieved through the Renters’ Rights Bill.”
Mr Pennycook did not address directly whether specifically one month’s rent in advance would be prohibited.
More harm than good
Advance rent payments are often used for various reasons, such as when a tenant has a poor credit history, cannot provide a guarantor, or has recently arrived in the UK.
In a webinar for letting agency platform Goodlord, the firm’s managing director, Oli Sherlock, warned that banning advance rent payments could do more harm than good.
He said: “The point of the bill was to make a fairer private rental sector and give tenants a better standard of living making the playing field more level between tenants and landlords. However, stuff like this amendment is limiting potentially accessible people to property, not encouraging it.”
Tags:
advance rent payments, housing minister Matthew Pennycook, labour government, Landlords, Letting Agents, rental security, renters rights bill, Tenant rights
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Member Since October 2022 - Comments: 2
10:32 AM, 29th November 2024, About 1 year ago
What planet has the minister dropped off . No wonder more landlords are selling up.
It’s hard enough getting tenants to pay rent on time .
Less housing bigger rents
Well done labour
Member Since January 2024 - Comments: 350
10:41 AM, 29th November 2024, About 1 year ago
That should work out well. I imagine every landlord will be asking for guarantors, with checks on whether the guarantor has assets, good income, etc.
No doubt Labour will then stop landlords asking for guarantors, at which point landlords will just sell up!
Member Since February 2023 - Comments: 39
10:44 AM, 29th November 2024, About 1 year ago
Large rent advances are a direct result of the 5 week deposit cap. Many people without a UK guarantor don’t have sufficient options.
Removing the rent advance will effectively remove this segment of applicants.
It’s crazy how little information they have of their own before making laws.
Member Since December 2023 - Comments: 31
10:51 AM, 29th November 2024, About 1 year ago
I’ve issued S21 notices to 25 of my tenants – I’ve had enough of both the Tories’ and Labour’s meddling in the PRS.
I’m not risking the loss of control of my properties as a result of government interference and paying taxes at every turn for the privilege.
Let the government and councils house them as they clearly don’t want me to.
Sorry tenants, it’s nothing personal..
Member Since May 2014 - Comments: 620
10:58 AM, 29th November 2024, About 1 year ago
Reply to the comment left by Andrew Sample at 29/11/2024 – 10:32
So Pennycook would like tenants to try before they buy and also have no fixed term contract.
This is becoming more farcical every day.
I wonder what his next bright idea will be!
Member Since May 2015 - Comments: 2201 - Articles: 2
10:59 AM, 29th November 2024, About 1 year ago
Sorry Mr/Ms prospective tenant, you are a big financial risk and the only way I can let you have a tenancy is with six months rent in advance, which you have offered. Since accepting rent in advance is illegal, I regret that I cannot offer you a tenancy. While you shiver on a park bench, contemplate that it is government policy that has prevented you from renting.
Member Since August 2015 - Comments: 342
11:03 AM, 29th November 2024, About 1 year ago
That’s a shame, I won’t be able to take International students. They are after all financially propping up British universities. Another unintended consequence?
Member Since May 2015 - Comments: 2201 - Articles: 2
11:10 AM, 29th November 2024, About 1 year ago
Reply to the comment left by Stella at 29/11/2024 – 10:58
Next bright idea? Rent guarantee insurance discriminates against tenants on benefits and will be banned.
Member Since June 2013 - Comments: 3248 - Articles: 81
11:13 AM, 29th November 2024, About 1 year ago
Reply to the comment left by TheMaluka at 29/11/2024 – 10:59
Well said Maluka & the rest of u.
Member Since April 2017 - Comments: 40
12:24 PM, 29th November 2024, About 1 year ago
How about rather than issuing a 12 month contract , instead twelve one month contracts are issued .. each one with rent payable in advance