New rules on rent in advance

The government has issued new guidance that tightens the rules on rent in advance—and councils now have clearer powers to act when landlords or letting agents step out of line. Under the Renters’ Rights Act, taking large sums of rent upfront is no longer allowed in most situations. The change aims to stop upfront rent being used as a gatekeeping tool and to make renting fairer and more consistent.

Sharon Canning. Owner of Move On Sales and Lettings

What’s now illegal

• Landlords and agents cannot demand rent before both sides have formally entered into the tenancy. That includes asking for the first month’s rent alongside the holding deposit if the agreement hasn’t been signed by both parties.
• They also can’t accept an offer of several months’ rent paid early as a way to “secure” a property before the tenancy is executed. Even if the tenant volunteers, accepting that payment before the agreement is signed breaches the rules.
• During an active tenancy, a landlord can’t bring forward the payment date or insist on early payment by relying on a clause in the contract. Any clause that tries to override the agreed rent due date has no effect.

Councils can now enforce these protections. If a landlord or agent requires rent early, invites it, or allows it through neglect or complicity, local authorities can issue civil penalties. Fines may reach up to £7,000 for requesting rent in advance before a tenancy is entered into, and councils can conduct unannounced inspections at premises where tenancy records are kept.

What evidence matters

If a tenant reports being asked to pay rent early, councils say the most helpful items are:

• Proof of payment made in advance (bank statements, receipts).
• Records that show pressure or encouragement to pay early—texts, emails, or voicemails.

On the other side, a landlord or agent defending their position should provide:

• The signed tenancy agreement.
• A clear record of rent payments received.
• Evidence of steps taken to refund any rent taken before it fell due.
• Communications with the tenant relevant to the timeline and terms.

Illustrative breaches

• Requiring rent at the holding stage: A tenant pays a holding deposit and is told to transfer the first month’s rent and the tenancy deposit before the landlord signs. Because rent is demanded before both parties have entered into the tenancy, that’s a breach.
• Accepting six months upfront to “lock in” the deal: A tenant wants to move quickly and offers several months’ rent before anything is signed. If the landlord takes the money and only then moves to sign, that again breaks the rules—accepting rent in advance prior to entering into the tenancy is not permitted.
• Forcing earlier payment mid-tenancy: A landlord points to a clause allowing them to bring the due date forward and requires rent earlier than agreed. That clause has no legal effect; requiring early payment during the tenancy is a breach.

Where advance payments are allowed

There are narrow, important exceptions:

• Homelessness duty lettings: When a local housing authority arranges a tenancy to discharge its homelessness duty, it may pay rent upfront—even before the agreement is signed—and can agree lump-sum rent payments (for example, every six months) after the tenancy begins. Local authorities are not “relevant persons” under the Tenant Fees Act 2019, and this specific type of tenancy is exempt from the usual rent-in-advance restrictions once started.
• Voluntary early payment by a tenant during a tenancy: If a tenant chooses—without pressure—to pay one or more months ahead during an ongoing tenancy, the landlord is allowed to accept that payment. The key distinction is voluntariness and timing: it must be after the tenancy has begun, and not compelled or used as a condition.

Practical takeaways

• Landlords and agents should align procedures so rent is only taken on or after the moment both parties have entered into the tenancy—never at the holding stage and never as a precondition to signing.
• Clauses that purport to change due dates or demand early rent won’t protect you; update templates to reflect the law.
• Keep thorough records. If anything is taken in error, move quickly to refund and document your actions.
• Tenants should keep communications and payment evidence. If asked to pay rent before signing, push back—this request may be unlawful.

The bottom line: upfront rent is now tightly restricted, with targeted exemptions for council-arranged homelessness placements and genuinely voluntary early payments during a tenancy. Councils have the teeth to enforce, so getting the sequence and documentation right is essential.

Sharon Canning and her team at Move On, are a multi-award winning company who specialise in lettings and are renowned locally of being the experts. For a free, friendly chat, contact Sharon or her team, or email sharon@moveon.biz.

 

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