Private landlords will no longer be able to demand several months’ rent in advance thanks to Labour’s anticipated Renters’ Rights Bill. New regulations will put a cap on advance payments at one month’s rent, as per a report from the I.
The current system does not have a maximum limit, causing some potential tenants to pay out hefty sums just to secure a home, which may lead to debt. Landlords can request one month’s rent plus a deposit under the new rules; according to the Tenant Fees Act 2019, the deposit is capped at six weeks’ rent.
These measures aim to offer “financial assurance” to landlords while targeting “unscrupulous” ones.
Deputy Prime Minister and housing secretary Angela Rayner said: “We’re putting an end to renters being ripped off by outrageous upfront costs that leave them struggling to make ends meet or locked out of housing altogether. Our Renters’ Rights Bill will transform the rights of 11 million private tenants, ending rental bidding wars and abolishing ‘no fault’ eviction, making the system fairer and giving renters more security, stability and protections.”
Private renters are already subjected to rigorous referencing and affordability checks when trying to secure a property. These checks can include providing an employer’s details, several months’ worth of payslips or even needing a guarantor, reports the Mirror.
However, landlords argue that the ban would leave them vulnerable to unreliable tenants.
Protests took place in December 2024 over rent caps and social housing
(Image: Getty Images)
Chris Norris, from the National Residential Landlords Association (NRLA), told the I that this move would “cut off any assurance responsible landlords might seek when renting homes to those who cannot easily demonstrate their ability to sustain tenancies and pay their rents.”
Norris explained that landlords only request rent upfront when a potential tenant is “unable to meet regular referencing requirements” in order to “mitigate the risk of default.”
He added: “Commonly this happens when a tenant is new to the country and does not have a track record in the UK, such as international students, or where they are unable to provide sufficient evidence of income to sustain the tenancy. This includes applicants that meet the minimum income requirements for a tenancy but are employed on a short-term or variable basis with an income that fluctuates accordingly.”
Private renters are already subjected to rigorous referencing and affordability checks
(Image: Getty Images)
The NRLA has called on the government to “provide clarity” on how renters can prove their ability to afford their rent in the future. Ben Twomey, the Chief Executive of Generation Rent, said it was “great news” that the government has decided to close “this damaging loophole.”
He remarked: “Finding a new home to rent is expensive and stressful enough without having to stump up more than a month’s rent in advance. There is no good reason that landlords would need this alongside a deposit, and it can force people into debt, trap them in poverty and, in some cases, lead to homelessness.”
Labour’s Renters’ Rights Bill is also taking aim at other aspects of the rental sector, including putting an end to “bidding wars” for properties and introducing regulations to prevent rents from being hiked up through clauses in tenancy agreements. The bill is currently at the report stage in the House of Commons, with one more reading to go before it progresses to the House of Lords.