The Renters’ Rights Bill was back in the House of Commons on 14th January 2025 for the report stage and third reading.  The Government had tabled numerous amendments to the Bill, and sought MP’s approval of these changes. One controversial amendment is a cap on the amount of rent that landlords can request in advance to one month.  There is currently no legal limit on advance rent payments, with landlords requesting 12 months of rent in some cases. Tenant and landlord groups have disagreed over whether a cap would ultimately benefit or disadvantage private renters.
The debate on this matter played out amongst MPs in the House of Commons. Housing Minister Matthew Pennycook argued that ‘requiring multiple months of rent from a tenant in advance when agreeing a tenancy is unfair’, suggesting that it ‘places considerable strain on tenants and can exclude some people and families from renting altogether.’  However, David Simmonds, the Shadow Minister for Housing, Communities and Local Government, claimed that banning substantial rent in advance payments took away important ‘safeguarding arrangements that give the landlord confidence that they will not lose out’, meaning that landlords will be less likely ‘to make allowances for financially riskier tenants, such as those with a poor credit record’. This would lock ‘financially vulnerable people out of the rental market.’
Although the Bill, including the cap on rent in advance payments, was approved by MPs and will now proceed to the House of Lords, the Government will need to address the issues highlighted in this debate if they are to ensure that the legislation has no unintended consequences.
The argument for: Improved access and affordabilityÂ
By bringing in a cap on rent in advance payments, Government aims to make the private rented sector more affordable and accessible for tenants. The TDS Charitable Foundation’s Voice of the Tenant survey revealed that 71% of private renters faced challenges when searching for a suitable rental property, which were most commonly related to affordability.  Nearly two in five tenants struggled to find an affordable property during their last search, 17% said they found it difficult to afford the deposit on the property, and 13% found the request for rent in advance challenging. For some groups of tenants who may be more financially vulnerable, these figures were higher, with 15% of tenants on a low income, 16% of tenants in receipt of benefits, and 23% of tenants who are unemployed saying that they struggled with the payment of rent in advance. Therefore, a cap on advance rent payments should help to improve access to the private rented sector.
The argument against: New barriers for tenants deemed financially riskyÂ
The TDS Charitable Foundation’s Voice of the Landlord survey showed that the practice of requesting rent in advance is widely employed by landlords. Over a third of landlords stated that they had requested rent in advance for their most recent letting, and 66% of these said they adopted it as standard practice. Many landlords will, therefore, be affected by the cap.
The main charge against the limit on advance rent payments is that landlords will be less inclined to rent to tenants who they consider be more financially risky, including those with a poor credit history, those in receipt of benefits, and international students. Previously, the payment of rent in advance in larger sums helped to assure landlords who may otherwise be concerned that such tenants would not be able to maintain the tenancy. This suggests that some groups may increasingly struggle to access the private rented sector after the Renters’ Rights Bill becomes law. The Government will need to consider what incentives will be in place for landlords to rent to tenants who are deemed financially risky.
Alternatives to rent in advance
If the possibility of substantial advance rent payments is removed, there are alternative safeguarding arrangements that can be employed. In the House of Commons, the Housing Minister stated that ‘options are available to tenants and landlords to ensure that rent in advance need not be used – requesting a guarantor or engaging in landlord insurance, for example’.
The Voice of the Landlord survey showed that a quarter of landlords requested a guarantor for their most recently letting, showing that it is already a relatively common practice. It may become even more common once the Renters’ Rights Bill passes in law.
The TDS Charitable Foundation has formed partnerships with the national homelessness charity, Crisis, and a local homelessness charity, DENS, to improve access to the private rented sector for people in housing need. Both projects have been exploring the use of landlord rent guarantee insurance as tenants moving out of homelessness may be considered financially risky by landlords.
In order to address the concerns about the impact of the cap on rent in advance, the Government will need to address the challenge of unintended consequences from the limit on advance rent to one month.
