Landlords to be banned from asking for money upfront under new renting rules

Private landlords will be banned from asking tenants for several month's worth of rent payments upfront as part of Labour's upcoming Renters’ Rights Bill.

According to a report from the I, the government will introduce new rules that cap advance payments at one month. Currently, there is no cap on how many months of rent a landlord can demand from prospective tenants, meaning some people could be forced to fork out thousands of pounds to secure themselves a home – potentially forcing some to take on debt.

The new rules will allow landlords to ask for one month's rent alongside a housing deposit. Under the Tenant Fees Act 2019, a deposit can be up to six week's rent. The government says this will provide "financial assurance" to landlords while also cracking down on “unscrupulous” property owners.

Deputy Prime Minister and secretary of state for housing 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 already face scrupulous referencing and affordability checks when trying to obtain a property. These checks include needing to list an employer, providing months' worth of payslips or having to provide a guarantor. However, landlords claim the ban would leave them at risk of unreliable tenants.

Chris Norris, of the National Residential Landlords Association (NRLA) told the I, that the 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 said landlords only ask for rent upfront when a prospective tenant is "unable to meet regular referencing requirements” 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.”

The NRLA has asked the government to “provide clarity” on how renters can demonstrate their ability to afford their rent going forward. Ben Twomey, the Chief Executive of Generation Rent said it was “great news” that the government has decided to close “this damaging loophole.”

He said: “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 will also be tackling other areas of the rental market, such as banning "bidding wars" for rental properties and regulating rent increases by no longer allowing them to be written into rental contracts. Currently, the bill is still in the House of Commons and is at the report stage. One final reading will be made to the commons before moving it to the House of Lords.

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