Private landlords can currently demand large upfront rent payments, leaving many Brits financially strained or in debt. The upcoming Renters’ Rights Bill seeks to cap advance rent at one month. Landlords could still request one month’s rent upfront and a security deposit of up to six weeks, per the Tenant Fees Act 2019.
Lawhive’s UK lawyer and head of legal operations, Daniel McAfee, reflects on the Bill’s potential to transform landlord-tenant dynamics, with major changes to financial obligations and tenant protections affecting all rental agreements.
He said:
“The ban on “no-fault” evictions, which would abolish Section 21 evictions, fundamentally alters the balance of power between landlords and tenants. While this move is designed to provide greater security for tenants, it may inadvertently lead to an increase in disputes. Without the ability to evict without cause, landlords may become more stringent in their tenancy agreements and more likely to pursue legal action to regain possession when issues arise. This could increase the burden on courts, which would need to handle a surge in possession claims where landlords are required to demonstrate “robust grounds” for eviction.”
“Restrictions on in-tenancy rent increases could lead to future legal challenges, particularly if rents fail to keep pace with market inflation. Landlords may argue that such restrictions interfere with their ability to maintain a fair return on investment. The law will need to strike a balance between protecting tenants from excessive rent hikes and allowing landlords to adjust rents in line with economic conditions.”
“The proposed amendment to the Renters’ Rights Bill, prohibiting landlords from requesting or accepting more than one month’s rent in advance, is a significant step in rebalancing the relationship between landlords and tenants. This move seeks to address affordability challenges faced by tenants, particularly in the current climate of rising living costs.
“The law directly addresses one of the barriers to entry for tenants—large upfront costs. By capping advance payments, it provides greater accessibility for renters while curbing the potential for financial exploitation.
“Tenants gain more security against unfair practices, such as arbitrary demands for excessive upfront payments. This change also supports their ability to challenge unjust rent increases or evictions under broader tenancy reforms.”
McAfee explains how the law redefines landlord rights and responsibilities:
“The proposed cap on in-tenancy rent increases could raise potential legal conflicts, especially concerning contract law and market pricing. Landlords may argue that the cap interferes with their ability to set rents at market rates, potentially leading to challenges based on contractual freedom. The cap will need to be justified as a reasonable measure to protect tenants, without unduly infringing on landlords’ rights to negotiate terms freely.”
“The law limits landlords’ ability to set financial terms that could disadvantage tenants, thereby shifting their responsibilities towards fostering a fairer and more accessible rental market. It aligns landlords’ obligations with broader societal goals of housing affordability and equity.
“Landlords should focus on efficient screening processes and consider alternative methods to secure tenancies, such as guarantor services or insurance products, rather than relying on large deposits or upfront payments.”
“Under Awaab’s Law, landlords who fail to address serious hazards such as damp or mold face significant penalties, including fines up to £7,000 and possible prosecution. Non-compliance could also lead to loss of rental income and damage to the landlord’s reputation, especially if tenants are empowered to take legal action. The law will likely prompt landlords to be more proactive in property maintenance, though it may also lead to disputes over the interpretation of what constitutes a “serious hazard.”
The UK lawyer advises on the compliance actions for landlords and penalties for non-compliance:
“Landlords must review and amend tenancy agreements to ensure they do not stipulate advance payments exceeding one month’s rent. Property management systems should also be updated to reflect this change, and staff should be trained on the new requirements.
“Failure to comply could result in financial penalties, regulatory action, or potential legal disputes with tenants. Landlords could also face reputational damage, making adherence to the new rules essential.”
When it comes to implications of legal eequirements to accept tenants with children or those on benefits:
“The legal requirement to accept tenants with children or those on benefits represents a significant shift in landlords’ rights to choose who they rent to. This measure aims to ensure fair access to housing, but it could be met with resistance from landlords who feel that their ability to manage risks is being compromised. The law will need to provide clear guidelines to prevent discrimination while protecting landlords from undue financial risk.”
Tenants can seek property standards without costly legal action:
“The bill’s promise of “greater protections” for tenants aims to address long-standing concerns about tenant vulnerability in the private rented sector. However, these protections must align with existing landlord-tenant law, particularly the principle that both parties have rights and obligations. The bill will need to be carefully balanced to ensure that while tenants receive enhanced protections, landlords are still able to manage their properties effectively and fairly.”
“The proposed changes could include provisions that improve tenants’ access to compensation or alternative dispute resolution mechanisms. These measures ensure landlords are held accountable without requiring tenants to resort to costly legal proceedings.”
“The ban on “no-fault” evictions is likely to enhance tenant security in both the short and long term. In the short term, tenants will benefit from greater stability, knowing they cannot be evicted without cause. In the long term, this security could foster better tenant-landlord relationships and contribute to a more stable rental market. However, there is also a risk that landlords might become more selective or raise rents pre-emptively to mitigate perceived risks.”
“If landlords are required to provide justifiable reasons for eviction, the courts will likely face an influx of possession claims. The need to establish robust grounds could lead to more protracted and contested cases, slowing down the eviction process. The courts may need to adapt by streamlining procedures or increasing resources to manage the expected surge. However, this could still result in delays and increased costs for both parties, potentially exacerbating housing shortages as properties remain tied up in legal disputes.”
Tenancy terms, agreement endings, and maintenance standards under new amendment explained:
“The law will likely introduce changes to tenancy agreements, particularly around renewals and termination conditions. This could result in more transparent and tenant-friendly terms.
“By encouraging affordability, the law indirectly promotes greater tenant stability. Additionally, new rules are expected to reinforce landlords’ obligations to maintain properties at a decent standard, providing tenants with more recourse to address substandard conditions.”
The lawyer advises on addressing substandard living conditions and eviction protections:
“The Bill also bolsters eviction protections by eliminating practices that disproportionately affect tenants unable to meet excessive financial demands at the outset of a tenancy.
“The law reinforces tenants’ ability to report and resolve complaints about substandard living conditions. Landlords may face stricter oversight, ensuring properties meet legal safety and maintenance standards”
McAfee added:
“This proposal is a welcome move for tenants, but landlords and property managers must be proactive in understanding and complying with the new requirements. While campaigners have celebrated the measure as a victory for tenant rights, critics from the property sector argue it may introduce additional burdens on landlords, potentially impacting rental availability.
“Balancing these concerns will be key as the Bill progresses through Parliament.”
I guess this could be another reason for more landlords leaving the market. I wonder how this will impact on homelessness, which is already a major problem in certain areas?
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The content on this article now well known by most in the property sector & the ethos of the RRBill is undoubtedly biased towards tenants.
This government’s failure to really understand the rental concept being a “two way” deal for landlords & tenants to initially accept terms on offer.
If you can’t afford something then one has choices & can’t expect a landlord to act as a charity or nurse maid.
Equally there are both bad tenants & landlords but a small proportion in comparison to renting as a whole & one would think the government should have adequate “policing” & remedies in place.
All in all the current proposals for the RRBill will fail to deliver for both landlords & tenants alike.
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The content on this article now well known by most in the property sector & the ethos of the RRBill is undoubtedly biased towards tenants.
This government’s failure to really understand the rental concept being a “two way” deal for landlords & tenants to initially accept terms on offer.
If you can’t afford something then one has choices & can’t expect a landlord to act as a charity or nurse maid.
Equally there are both bad tenants & landlords but a small proportion in comparison to renting as a whole & one would think the government should have adequate “policing” & remedies in place.
All in all the current proposals for the RRBill will fail to deliver for both landlords & tenants alike.
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Proof, if we needed more, that this country is truly run by insane idiots.
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You only had to watch yesterday’s debate in the Commons which demonstrated the widespread lack of understanding of problems amongst MPs and how politically blinkered many are.
One even welcomed the banning of large deposits of 6 months rent, even though that has been illegal for a while. Sadly, nobody on the other side picked him up on it.
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A ban on upfront rent for 6 months or a year would be difficult to deal with. Overseas tenants with no UK credit history will be unattractive to Landlords (and Agents). Or will Agents take the rent on account and pay the Landlord monthly – we await the ‘small print’!
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To be fair, we do that anyway for managed tenancies… If we take 6 months rent, we still pay it out on a monthly basis. The reason I have always given is that if a Landlord doesn’t pay the mortgage and it gets repossessed, the tenant can then have the rest of the rent returned to them, for example.
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JW – whilst logically an option for the agent to hold advance rent in escrow – your forgetting an agent at present / landlord unable to take any additional / extra payments (5 weeks bond deposit, 1 week reservation etc) do we really think under the RRBill it will be any better?
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Bye bye overseas students with no UK Guarantor. In fact probably bye bye students.
Bye bye business owners in their first year without a tax return to prove income.
Bye bye tenants in probationary periods with a salary increase at month 4.
Bye bye tenants who have a shortfall in affordability but have savings for a proportional advance rent payment.
Bye bye tenants with any form of adverse credit history or low credit rating.
Did I miss any?
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Yes, Mr Applicant with poor credit history, I understand you have worked really hard to pull together 6 months rent in advance so that you can secure a tenancy, but we are simply not allowed to take it. Unfortunately this does mean we have to give the tenancy to another applicant who has a squeaky clean credit history. Don’t fear though, here is a lovely comfortable cardboard box and I think, if you are lucky, I’ve just seen a free doorway in that empty shop over there.
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Buy shares in tent manufacturers, it’s going to be a booming industry.
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I’ve been telling people to buy shares in cardboard for years.
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Whilst I wasn’t too concerned about the loss of S21 with the Tory promise to overhaul the Court system before bringing it in, I am more concerned now. The last one I did was incredibly fast as Court processes go, and that was still 3 months from application to Court date and possession warrant, and then nearly 5 months until the bailiffs could access due to dogs left in the garden and useless dog wardens and an RSPCA with no interest… so 8 months with thousands owed in rent to give mandatory possession under S8. But when ending EVERY TENANCY is going to have to go to Court, in amongst murderers, speeding, parking fines, school absence, theft etc? It’ll be 8 months just to get a date, which will probably be in a further 2-3 months at least!
And no upfront rent? As many others have said, this will impact the ‘vulnerable’ more, who will then be desperate and end up with ‘rogue’ private landlords with all the problems that brings. It is enforcement of the current legislation that is needed, not more legislation! We all want good, paying tenants, who look after their nice, energy efficient, well-maintained homes, with a landlord who respects the tenants home, tenancy and right to a fair rent and carries out repairs properly in a timely manner. What we need is help to make that happen…
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“Landlords could still request one month’s rent upfront and a security deposit of up to six weeks, per the Tenant Fees Act 2019” – erm, I think you mean 5 WEEKS …
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I thought that, but I believe it can be 6 weeks for tenancies with a really high rent, isn’t it?
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Don’t forget that s24 was the reason most landlords had to either increase rent or sell up. I have never asked for 6 months rent in advance but I have been offered it. We have one tenant who had just moved to the area and was seeking a job. He offered to pay 6 months up front and has now been an excellent tenant for many years. Without this offer we would never have accepted him. I see nothing in this new legislation for landlords. I would have liked to see landlords having a right to do at least a six month inspection of their property with a tenant only being allowed to refuse a request twice. We have a right to know who exactly is living in our properties and the state it is in. Local authorities are still ignoring Gov. guidelines regarding eviction notices and are refusing to accept responsibility until the bailiffs arrive. It is the landlord’s property and tenants are only borrowing it for a fee. This whole mandate that a tenant has the right to do as he likes in his home is wrong
and will help neither the landlord or the tenant. Tenants, if the legislation goes through can now move into a property for just a few weeks, give one months notice and move on. Holiday let owners who rented to locals for the six month winter period will no longer be able to do this.
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