In a list of amendments submitted yesterday at the report stage of the Renters’ Rights Bill, and first reported in The i Paper, the Secretary of State for Housing, Communities and Local Government put forward an amendment that would make it unlawful for a landlord to “demand or accept more than one month’s rent in advance in respect of a tenancy or licence of residential accommodation”.
Currently, according to Shelter, there is no legal limit on how much rent a landlord can ask for upfront, with the firm adding that it is typical for some landlords and agents to ask for more than a month’s rent in advance.
Landlords typically ask for rent in advance to cover the start and end of a tenancy.
The 40-page document also includes further amendments that would prevent student leases being signed before March in the year before they are intended to start, a review of tenancy deposit schemes and requirements within a year of the Renters’ Rights Bill becoming law, and the establishment of a report on the affordability of rent and proposals for making rents more affordable.
The Renters’ Rights Bill is due to have its third reading in the House of Commons on 14 January, where these amendments will be scrutinised.
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Chris Norris, policy director for the National Residential Landlords Association (NRLA), said that restricting rent in advance, combined with freezing housing benefit rates and insufficient rental housing to meet demand, is “creating significant barriers for those with poor or no credit histories needing to access the sector”.
He continued: “This includes international students and those employed on a short-term or variable basis with an income that fluctuates. The Government is cutting off any assurance responsible landlords might seek when renting to those who cannot easily prove their ability to sustain tenancies and pay their rents. In the end, those who will suffer most are those the Government most wants to help.
“Ministers must provide clarity on how tenants unable to easily demonstrate their ability to afford and sustain their tenancies should do so. Expecting landlords to take on high levels of risk without practical assurances is not a sustainable solution and risks further exacerbating the challenges in an already constrained market.”
Timothy Douglas, head of policy and campaigns at Propertymark, said that while the Government wanted to change the private renting experience, banning taking rent in advance would be “potentially reducing options for tenants to access private rented property”.
“There are a wide range of circumstances and scenarios that impact how people pay their rent. For instance, some renters are on fixed incomes, not all tenants pass referencing and affordability checks, and some have insecure incomes due to their work arrangements.
“The UK Government must do more to understand why rent in advance is used by both landlords and tenants and avoid one-size-fits-all policies that mean some tenants may no longer be able to access private rented property,” he explained.
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Landlords could face one-month limit on advance rent in Renters’ Rights Bill amendment
