Rent in advance

As we have all seen, the Renters Rights Act is making a lot of changes to the way the private rented sector will operate, one of the changes being towards rent in advance.

'Rent in advance' is a lump sum of rent that a prospective tenant will provide prior to the tenancy start date. It was and is being used as a safety net and management of risk to the landlord. Tenants would choose to pay this for reasons such as a lack of a guarantor, low income or credit score, budgeting, and so forth. Landlords would take this money to ensure they do not run into rent arrears, potential damage, and to overall ensure cash flow. However, due to the new Renters Rights Act coming into the picture, rent in advance will not be legally viable in the near future.

The Renters Rights Act deems rent in advance to be an unfair practice, pushing prospective tenants to (in some cases) their financial limits and in turn not allowing them to access the sector completely. Once the act has been legalised, it will amend the Tenant Fees Act of 2019 to rule out all landlords and letting agents from requiring or accepting rent in advance. However, landlords and agencies will still be able to require up to one month's rent once the tenancy has been signed. The act will also alter the Housing Act 1988 to state from the start of tenancies there can be no enforcement of any terms that require rent to be paid in advance.

This change aims to protect prospective tenants from large requests for rent in advance.

Additional reads:

Legal compliance requirements for all landlords.

Why referencing in lettings is so important: