Asking for Rent in Advance

Until recently, it’s been common practice for landlords to ask for multiple months of rent in advance. These large sums have been paid in advance by tenants quarterly, half-yearly or even for an entire year. This requirement puts the affordability of rental properties out of reach for many prospective tenants. Those who do pay these huge amounts of upfront rent are faced with financial strain afterwards.

To tackle this issue, among many others in England’s private rented sector, the Renters’ Rights Act has set out new reforms. One of these reforms directly addresses upfront rent payments to make it fairer for prospective tenants to secure a rental property. New legislation came into effect on 1^st May 2026 that stipulates how much can be paid in advance and when it can be paid as well as restrictions on subsequent rent payments.

In this guide, we’ll explain the new rules on asking for rent in advance, why these rules are necessary and the penalties for not complying with them. We’ll also detail how landlords can protect their rental investments and the potential consequences of restricting rent in advance payments.

Rent in advance refers to a payment of rent by a tenant before the rental period begins. For the monthly rent payments to be made once a tenancy has started, the rent is paid on a due date, such as the 1^st of a month. This covers the entire month that follows that date until the next due date. Rent in advance, in this case, refers to rent paid before the due date.

For rent that’s paid before a tenancy begins, however, landlords have typically required multiple months to be paid upfront. This is generally to help minimise their risk, especially with tenants who don’t meet standard referencing criteria. For example, those with an irregular income, a poor credit history or who have recently moved to the country. These tenants are considered to be a higher risk for landlords. Having the rent paid in advance ensures that they won’t be left out of pocket.

As mentioned earlier, it’s not uncommon for landlords to ask for quarterly or half-yearly payments of rent in advance. Some even accept payment in advance for an entire year.

This rent in advance is different from a deposit. A deposit is held as security to protect against damage to the property or rent arrears. Rent in advance, on the other hand, enables the tenant to live in the property for a specific period.

There are various reasons why landlords may ask for rent to be paid in advance of a tenancy. Primarily, it gives them confidence that they won’t be left without vital rental income should a tenant struggle to pay the full amount or even any of the rent each month once a tenancy has started. It’s essentially a financial safeguard and ensures a consistent cash flow. It helps to mitigate a landlord’s risk if their tenant:

• Has a low income
• Earns an irregular income, such as being self-employed or working as a contractor
• Has a poor credit score
• Has recently moved to the country and has a lack of credit history
• Doesn’t have a suitable guarantor
• Stops paying the rent
• Leaves the tenancy early
• Needs to be evicted

Asking for more rent in advance than a standard month offsets potential risks and gives the landlord a buffer. This is particularly helpful when a tenant goes into arrears, especially as new rules have come into effect about rent arrears and the eviction process. The buffer can also help to cover legal costs and provide an income during an eviction process, which can potentially take a long time under the new legislation.

The government feels that taking large sums of rent in advance is an unfair practice, creating a barrier to housing in the private rented sector. It excludes tenants who are unable to raise the upfront funds needed and puts a strain on the finances of those who are able to pay the required rent in advance. Tenants who are particularly at risk in this situation are:

• Tenants with a low or irregular income and/or a poor credit score
• Young tenants with limited savings
• Tenants who receive benefits
• Recent immigrants and international students with a lack of credit history

The government believes that the practice of taking multiple months of rent in advance is exploitative. It is concerned that some landlords are choosing wealthier tenants and discriminating against others who don’t have access to such large sums of money. The government feels that the requirement for large sums of rent in advance is being used instead of carrying out suitable referencing and as a way to exclude certain groups of tenants.

The issue of paying rent in advance goes hand in hand with bidding wars. These result in tenants paying more than the asking rent and stretching their finances simply to secure a rental home. Rental bidding wars have now been banned under the Renters’ Rights Act.

In light of the government’s concerns, new rules have been put in place regarding rent in advance payments for England’s private rented sector. These rules will make it a fairer process when securing a rental home and increase the accessibility of renting for all tenants. With a cap now in place of just 1 month’s rent in advance, this levels the playing field for prospective tenants and makes the process more transparent.

Under the Renters’ Rights Act, asking for rent in advance is still legal but there are now restrictions in place for all new tenancies that have started on or after 1^st May 2026.

• Landlords and letting agents cannot ask for, encourage or accept any rent before a tenancy agreement has been signed by all parties.
• Once a tenancy agreement has been signed, landlords and letting agents can request up to 1 month’s rent in advance of the start date (or up to 28 days’ rent for weekly tenancies).
• Any clauses in the tenancy agreement to the contrary cannot be enforced.
• Once a tenancy has started, rent payments are payable on the rent due date as per the tenancy agreement. Landlords and letting agents cannot request that rent payments be made before the due date, regardless of any clauses written in the tenancy agreement, which cannot be enforced.

If a landlord or letting agent is found to be in breach of these rules, they can be penalised with civil financial penalties.

It should be noted that tenants can volunteer to pay more rent before the commencement of the tenancy but landlords and letting agents cannot imply a requirement to do that. Once a tenancy has started, if a tenant chooses to pay their rent earlier than the due date, such as to help with budgeting, they can do so. They can pay any amount of rent early, provided the tenancy has already started.

Under the Renters’ Rights Act, a cap of 1 month (or up to 28 days’ rent for shorter tenancy periods) has been placed on the amount of rent that a landlord or letting agent can request in advance from a tenant. This amount must be purely rent; it cannot hide extra fees.

It is prohibited to ask a tenant to pay more than 1 month’s rent in advance, regardless of the circumstances. For example, if they’re a student, have a lack of credit history or are self-employed. If there are concerns that would previously have been cause to ask for more rent in advance, other steps must be taken as a precaution instead.

Landlords and letting agents need to ensure that the cap is reflected clearly during the onboarding process, in tenancy agreements and in any communications with tenants. This is to protect against potential disputes and compliance issues that may arise.

Why has a cap been added to upfront rent payments?

Capping the rent in advance at 1 month prevents tenants from being faced with paying excessive amounts to secure a rental home. This removes the barrier that so many are faced with when trying to enter the rental market. It makes access to housing much fairer, rather than being based on who can afford to pay the largest sums.

From the 1^st May 2026, the rules changed as to when landlords and letting agents can ask for and accept rent in advance. Now, under the new legislation, it can only be asked for and accepted during the pre-tenancy period. This period begins once a tenancy agreement has been signed by all parties and ends before the tenancy starts. Rent in advance cannot be asked for on the start date of the tenancy.

For example, if a property is available from 1^st September at a rent of £1,200 per month, the landlord can ask the tenant for 1 month’s rent in advance, provided that the tenancy agreement has been signed and it’s before 1^st September. No more than £1,200 can be requested in advance and this must be used to cover the first month’s rent.

Once the tenancy has started, payment of rent cannot be requested until it’s due.

The new legislation also affects tenancy agreement clauses relating to payments of rent in advance. Any clauses in a tenancy agreement that state the tenant must pay the rent before the due date are null and void. A tenant does not need to comply with any such clauses and a landlord will be considered to be in breach if trying to enforce them. This applies to all types of tenants, regardless of their situation that would previously have warranted a request for rent to be paid in lump sums, such as quarterly, termly or half-yearly.

To ensure compliance, landlords need to review their tenancy agreements so that:

• All rent terms meet the new legislation
• Any clauses requiring the payment of more than 1 month’s rent in a rental period are removed
• Clauses stipulating a requirement for multiple months’ rent in advance are removed
• Clauses relating to alternative payment schedules are removed

Once a tenancy agreement has been signed, tenants may choose to pay more than 1 month’s rent in advance if they wish. However, it must be entirely voluntary. For example, it may be more convenient in their line of work to pay 3 months’ rent at a time or it may help with their budgeting needs. The key point is that landlords and letting agents cannot require tenants to make unlawful rent payments in advance. So as not to risk any compliance issues, it should be clearly documented that the tenant has voluntarily chosen to pay more rent in advance.

Yes, tenants who are eligible to claim housing benefits or the housing element of Universal Credit can use these benefits to pay for rent in advance. As benefit payments don’t cover this at the point it’s due, tenants can either apply for a discretionary housing payment from the local council or a budgeting advance from the Department for Work and Pensions (DWP) to help with this. The latter is an interest-free loan designed to help qualifying claimants pay for their rent in advance.

If a landlord or letting agent is reported by someone for having asked for rent in advance before a tenancy agreement has been signed, the local council has the authority to investigate the complaint and take enforcement action.

They can gather evidence, such as:

• A witness statement from the person who made the complaint
• Records of encouraging or accepting rent in advance, such as emails, text messages or voicemails
• Records of payment of rent in advance

Any evidence collected should be shared with the landlord or letting agent so that they can prepare their evidence in defence. This can include:

• A copy of the tenancy agreement
• Records of payments received from the tenant
• Records of communications regarding the rent in advance
• Steps taken to repay any rent that was paid before it was due

If the local council finds that a landlord or letting agent has asked for or accepted an illegal payment of rent in advance, a civil penalty notice can be issued. When this has been issued, the landlord or letting agent can also be instructed to pay back any illegal rent amount they’ve accepted from the tenant.

Penalties

For a first breach, a civil penalty of up to £5,000 can be imposed where a landlord or letting agent has asked for, encouraged or accepted rent in advance before a tenancy agreement has been signed.

If the same breach is committed within 5 years, the landlord or letting agent can be fined or prosecuted. The fine for committing a repeat breach can be up to £30,000.

There are two types of deposit that a landlord or letting agent can ask for: a holding deposit and a tenancy deposit. Both of these are acceptable and entirely different from the rent in advance.

Holding deposit

A holding deposit is used to reserve a property and cannot be more than 1 week’s rent. This pre-tenancy payment is held while the referencing process is carried out. If the tenancy doesn’t proceed, the holding deposit must be refunded within 15 days, allowing for permitted deductions.

If the tenancy proceeds, the landlord or letting agent can put the holding deposit towards the tenancy deposit or the first month’s rent, providing the tenant has given their consent to this. The tenancy agreement must also have been signed. If the agreement has been signed but the tenant requests the holding deposit to be returned, the landlord or letting agent must comply.

There are some instances where a landlord or letting agent can keep a holding deposit. These include when a tenant:

• Fails the right to rent check
• Provides false or misleading information
• Withdraws from the application process
• Doesn’t sign the tenancy agreement even though the landlord or letting agent has taken reasonable steps to do so

If a landlord or letting agent decides to keep a holding deposit, they must notify the tenant in writing, stating the reasons. This must be done within 7 days of the decision not to permit a tenancy agreement or the expiry of the tenancy agreement deadline. Failure to notify the tenant of the reasons in writing within this timescale will result in the holding deposit having to be returned.

Multiple holding deposits from different prospective tenants cannot be taken at the same time.

Tenancy deposit

A tenancy deposit acts as security against damage to the property and rent arrears. This can be requested as well as a month’s rent in advance before a tenancy starts. The maximum tenancy deposit that can be requested is:

• 5 weeks’ rent if the annual rent is less than £50,000
• 6 weeks’ rent if the annual rent is over £50,000

This cap applies to a joint tenancy, meaning a landlord or letting agent cannot ask for this amount from each tenant. The maximum amount applies to the property as a whole.

The tenancy deposit can be requested before the tenancy agreement is signed. It must be held in a government-approved tenancy deposit protection scheme within 30 days of payment. If a landlord or letting agent makes any deductions from this deposit at the end of the tenancy, they will need to provide evidence to support these deductions.

With the rent in advance being restricted to 1 month and the other rules that have come into effect since 1^st May 2026, such as an end to rental bidding, a restriction on rent increases and the end of Section 21 ‘no fault’ evictions, landlords have to work harder to protect their rental investments.

This involves being proactive and carefully managing the process from before the start of a tenancy and throughout it. Robust tenancy screening is essential and tenancy agreements must comply with the new rules. Clear communication with tenants should apply from the start and continue during the tenancy so that there’s no confusion over issues, such as consistent rent payments.

Additional safeguards

Another way to help mitigate risk is to ask a tenant to provide a guarantor if one is needed. This is a third party who agrees to cover the rent should the tenant stop paying it. It’s also worth considering putting rent guarantee insurance in place. This protects a landlord against financial loss should a tenant fail to pay their rent. As well as covering the loss of rent, it usually covers legal costs when a tenant needs to be evicted.

Using a letting agency

Rather than going it alone, a landlord can use the services of a professional letting agency. An agency can help find new tenants, collect the rent and manage the property throughout the tenancy. They will have compliant processes in place, helping a landlord to navigate the complex reforms. It should be noted that a landlord is still legally liable, however, for any breaches of the new legislation.

The Renters’ Rights Act aims to make the private rented sector a fairer, more transparent space. Rental property is to become more accessible for tenants and the rental market a more professional, less competitive place for landlords. However, there are concerns about the consequences of some of the new reforms, such as restricting the rent in advance.

Previously, having the option to pay several months’ rent in advance allowed more vulnerable groups of tenants to secure housing when their circumstances otherwise restricted them. For example, international students, contractors or self-employed applicants, new immigrants, applicants with a low or bad credit score and those earning a low income.

The strict rules of the Act will force landlords to change their behaviour to mitigate their risk. This will include stricter tenant screening, asking for guarantors, setting a higher asking rent or even leaving the rental market altogether.

A change in landlords’ behaviour

The various reforms that have come into force since 1^st May 2026 have drastically changed the way landlords are used to operating. Rent in advance has been capped to 1 month, rental bidding has been banned and Section 21 ‘no fault’ evictions have been scrapped. All of these mean that landlords are faced with worrying scenarios about non-payment of rent, high legal costs and long eviction processes. As such, they’ll have no choice but to change their procedures.

Robust tenant screening

The increased risk that landlords are now exposed to means they need to be much more cautious when selecting tenants. This means carrying out stricter checks for affordability and creditworthiness as well as requiring reassurance in the form of previous landlords’ references. Applicants with stable incomes and a good credit history are likely to be favoured over those with irregular incomes and a low or lack of credit history. The requirement for applicants to have guarantors has already increased, providing additional security against non-payment of rent.

Using the services of letting agents

Landlords are not only being more selective with the tenants they accept but many are now using the services of letting agents to carry out these checks for them. With so many reforms coming into force at the same time, landlords are preferring to rely on professional agents to help them instead of trying to navigate the new legislation by themselves.

Setting higher monthly rents

The restrictions on rent in advance payments increase some landlords’ risk of having late or missed payments from tenants. It can also affect their cash flow, causing them to consider the financial viability of some

Higher risk tenants

Not all tenants fit the mould of being employed with a good income and having a strong credit rating.

Low or irregular income

Those who have an irregular income – for example, if they’re self-employed or a contractor – are considered to be a higher risk for landlords. Landlords prioritise tenants with a steady income to ensure the rent is paid on time each month. Having the option to pay multiple months’ rent in advance before the new legislation was a way for those with an irregular income to get the rented homes they wanted.

Those with a low income already struggle to secure affordable housing and the potential higher rents that are expected will put this even further out of their reach.

Low credit score or an adverse credit history

Tenants who have a low credit score or a bad credit history, such as having CCJs, are at risk of being excluded from rental options as this tells landlords that they’re unreliable at managing their finances. Previously, to overcome this obstacle, landlords would ask for several months’ rent in advance to ensure that they didn’t lose out on any rental income. With the removal of this option, these tenants are going to struggle to find suitable housing unless they have someone who is willing to be a guarantor for them.

New arrivals to the UK and international students

Both of these groups have a lack of credit history in the UK and generally don’t have access to a UK-based guarantor. Before the new legislation came into effect, being able to pay several months’ rent in advance was a way to secure housing. Now that this option has been removed, these groups are at risk of being excluded by many landlords. This will severely narrow their options when it comes to finding rented accommodation.

Landlords leaving the market

A major concern that was anticipated before the legislation came into force was that landlords would make the decision to leave the rental market altogether, especially smaller landlords. This would be due to feeling under too much pressure to comply with so many new reforms at once and deciding that the risk was too high to make being a landlord worthwhile. The repercussion of this would be a smaller pool of long-term rental housing in an already overstretched market.

As expected, many smaller landlords served notice for possession of their properties before the 1^st May 2026. A significant increase in properties entered the market for sale, some with vacant possession and some still tenanted. Auction houses across England noted a surge in buy-to-let properties becoming available. Auction House reported that there was a 70% increase in tenanted property listings in April 2026 compared with the previous year. Whilst smaller landlords felt the need to exit the market, experienced property investors capitalised on it, snapping up properties at significant discounts.

As a landlord, it’s understandable that you’ll be more cautious now that the new rental reforms are in force. However, you don’t need to navigate the changes alone or compromise your investment in the process. At Trinity Finance, we’re here to offer support and expert guidance as you get to grips with the new legislation.

Whether you have a single buy-to-let property, run a student HMO or have a portfolio of rental properties, our mortgage and protection brokers can offer impartial advice to help ensure your property is protected and your investment goals are met. Give us a call on 01322 907 000 to book a consultation with one of our property experts.