Landlords will only be able to request a maximum of one month’s rent in advance if the new Renter’s Rights Bill becomes law.
The cap on advance rent is a new addition to the bill, which has progressed to discussion in the House of Lords.
Currently, there are no limits on the amount landlords can request as advance rent. Some tenants are asked to pay thousands of pounds upfront to secure a tenancy, with those with poor credit history or that are new to the UK being disproportionately affected.
What is advance rent?
Under current law, landlords can require new tenants to pay their rent in advance at the beginning of a tenancy. This protects landlords from tenants falling behind on their payments. However, it locks potential tenants without significant savings or liquid assets out of the already competitive rental market.
If the bill passes in its current form, landlords will be restricted to requiring one month’s rent paid in advance, as well as a security deposit equivalent to five or six weeks’ rent.
Key features of the Renter’s Rights Bill
The Renter’s Rights Bill has been described by the government as the ‘biggest shake up to the private rented sector for over 30 years.’ The bill is designed to strengthen the rights of tenants in the private rental sector, offering more protection against housing discrimination and unfair treatment.
As well as the cap on advance rent, some of the key features of the bill include:
- A ban on Section 21 ‘no fault’ evictions
- Stronger rights for tenants to request a pet
- A ban on landlords and agents accepting rents above those listed for a property to fight tenant ‘bidding wars’
- An end to fixed-term tenancies, replacing them with periodic two-month notice periods for tenants and four-month notice periods for landlords
- A ban on landlords refusing tenants in receipt of benefits
What’s not included in the Renter’s Rights Bill?
One proposed piece of legislation that hasn’t been included in the current version of the bill is a cap on rent increases during tenancies.
While a rent cap is supported by some MPs and has been introduced in Scotland, housing minister Matthew Pennycook has said the measure ‘could harm both tenants as well as landlords’ by removing housing from the rental sector.
Will the limit on advance rent become law soon?
The bill, including the proposed limit on advanced rent, has been discussed in the House of Commons and moved to the House of Lords for further debate.
If the bill passes through the House of Lords it will then become law, but it may face further amendments before that point.