Renters’ Rights Bill could prohibit advance rent payments

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.”