Renters' Rights Bill and rent in advance
Introduction
The Renters’ Rights Bill (RRB) has prompted debate about landlord practices in the private rented sector (PRS). While intended to protect tenants, one proposal - to ban all rent in advance payments – risks overlooking the practical role these payments play.
This blog explores how the conversation around rent in advance often misses its nuance, and why a blanket ban could do more harm than good.
How rent in advance is discussed?
Public discourse on rent in advance is often clouded by extreme cases and misinformation. For example:
- Housing minister Matthew Pennycook stated that the government wanted to stop demands for "large rent-in-advance payments," which he said could sometimes amount to 12 months of rent.
- Similar in tone, Angela Rayner, the Deputy Leader of the Labour Party, argued that tenants are “faced with outrageous upfront costs.”
Media coverage and political commentary frequently suggest landlords routinely demand six to twelve months’ rent upfront. This is a practice which, though portrayed as widespread, is far from the norm.
This narrative overlooks key facts about how most tenancies operate in practice and often ignores the legitimate reasons why some landlords may request rent in advance beyond the typical first-month payment.
The norm: One month's rent in advance
The majority of tenancies are set up so that the first month’s rent is paid – alongside a security deposit – before the tenant moves in. This standard practice aligns with monthly rent cycles and benefits both landlords and tenants. This most common form of rent in advance is not comparable to demands for multiple month’s rent. Yet political and media commentary often fails to distinguish between this norm and less common cases. As a result, the term ‘rent in advance’ becomes a catch-all, implying widespread misuse and fuelling calls for a blanket ban.
Challenging misleading figures
The 2024 English Private Landlord Survey found that 43% of landlords ask for “rent in advance”. However, the survey question fails to clarify whether this referred to the standard one month, or whether in advance payments was the equivalent to a longer period. Because of this ambiguity, misleading interpretations of the data has been the result.
What NRLA data shows
Data from NRLA’s Q4 2024 consultation provides a different picture:
- 91% of landlords take either no advance payment at all or else just one month’s rent in advance.
- Just 8% of landlords request more than one month’s rent in advance (a small number declined to say).
These findings challenge the assumption that excessive upfront payments are widespread. Instead, they suggest requests for larger upfront payments are the exception, not the rule.
Why do some landlords take additional rent in advance?
There are many valid, practical reasons why some landlords may receive more than one month’s rent in advance. NRLA data highlights that when larger advance payments are made, it is often at the tenant’s request or is a result of specific circumstances. Chart 1 shows why landlords request additional upfront payments.
The chart highlights reasons why advance payments may be more than one month’s rent:
- Tenants unable to pass affordability thresholds due to being self-employed or having an irregular income
- Overseas tenants who may lack a UK credit history.
- Tenants with a poor credit score, where additional rent in advance provides reassurance to landlords.
In these cases, paying rent in advance helps tenants find homes they might otherwise struggle to rent, rather than serving as a barrier.
Summary
The NRLA research challenge the misconception that rent in advance is simply an unfair financial burden imposed by landlords. Instead, for certain tenant groups - self-employed individuals, international students, and those with poor credit histories - upfront rent payments serve as an enabler of access rather than a barrier.
The claim that landlords routinely demand excessive upfront payments is not supported by NRLA data. The introduction of a cap risks taking away from renters a mechanism that many voluntarily use to secure a home. Instead of a blanket ban, the Government should provide clarity on alternative ways for those tenants who cannot use traditional affordability credentials to access the rental market. Otherwise, those they seek to protect may be the most harmed by the proposal.
