From May 2026, a major change is coming to the UK rental market. Under the Renters’ Rights Act, landlords and letting agents will no longer be able to request more than one month’s rent upfront. The reform is intended to make renting fairer and more accessible, but it may also trigger a series of unintended consequences across the sector.

For many years, paying rent in advance has been a common solution for tenants who did not fit standard affordability checks. Students, overseas renters, and those without guarantors often relied on upfront payments to secure a home. While the new rules aim to remove financial barriers, they could also reshape landlord behaviour in ways that make renting harder for some of the very groups the legislation seeks to protect.

With rental supply still well below pre pandemic levels and demand continuing to rise, competition for homes remains intense. In this environment, even small regulatory changes can have far reaching effects. Below, we explore what the rent in advance ban means in practice and the eight key knock on effects landlords, agents, and tenants should prepare for.

What is rent in advance?

Rent in advance is a payment covering multiple months of rent that is made before a tenancy begins. It is separate from the security deposit and is used as rent rather than being held against damage or arrears.

Historically, landlords have used rent in advance as a way to manage risk, particularly when letting to tenants without a UK credit history, stable income, or a suitable guarantor. For many renters, it has been the only way to demonstrate reliability.

What will change under the Renters’ Rights Act?

From 1 May 2026, landlords and letting agents will be legally restricted to requesting just one month’s rent upfront.

Any tenancy clause requiring more than one month’s rent before the relevant rental period will be unenforceable. This represents a clear shift away from previous practices where tenants could be asked for six or twelve months of rent in advance.

Security deposits will remain capped at five weeks’ rent for most tenancies, or six weeks where annual rent exceeds £50,000. Tenants may still choose to pay rent in advance later on for personal budgeting reasons, but this must be entirely voluntary and not a condition of the tenancy.

Why is the Government banning rent in advance?

The reform is designed to reduce financial barriers to renting and prevent unfair practices.

Large upfront payments have long excluded renters who lack savings or traditional financial credentials. Young renters, benefit recipients, international students, recent arrivals to the UK, and tenants with damaged credit histories have often been forced to pay thousands upfront simply to access housing.

By capping upfront rent at one month, the Government aims to ensure that access to rented homes is based on affordability and suitability rather than the ability to provide a large lump sum. The change also targets extreme cases where tenants were required to pay many months of rent before being allowed to move in.

This measure forms part of a broader set of reforms intended to create a more balanced and transparent rental market, alongside changes to eviction rules and rent increase controls.

When will the new rules apply?

The changes will be introduced in stages.

Between December 2025 and April 2026, local authorities will receive new enforcement powers and official guidance will be issued to landlords, agents, and tenants.

From 1 May 2026, fixed term assured shorthold tenancies will be replaced with rolling periodic tenancies, and the one month limit on rent in advance will come into force.

8 unintended impacts of the rent in advance cap

While the policy is well intentioned, it may produce outcomes that reshape the market in unexpected ways.

1. Tighter affordability and referencing standards

Without the option of upfront payments, landlords may lean more heavily on credit checks, income thresholds, and guarantor requirements. This could disadvantage tenants with limited financial history or non traditional employment.

2. Pressure on monthly rents

Some landlords may increase monthly rents to compensate for perceived risk. Although tenants will face lower move in costs, long term affordability may worsen.

3. Increased cashflow risk for landlords

Moving from lump sum payments to monthly rent increases exposure to arrears. For smaller landlords in particular, this may make certain tenancies harder to sustain.

4. Fewer options for international students and new arrivals

Tenants new to the UK often lack local credit history or guarantors. Previously, advance rent helped bridge that gap. Without it, these renters may struggle to compete.

5. Greater difficulty for tenants with poor credit

Renters with past financial issues may find it harder to secure housing when they cannot offset risk through advance payment.

6. Reduced access for low income and irregular earners

Tenants with fluctuating income, such as gig economy workers or migrants, may be viewed as higher risk, further narrowing their housing options.

7. A shrinking pool of long term rental homes

Some landlords may decide the regulatory landscape is no longer viable and exit the long term rental sector, reducing overall supply.

8. Growth in informal or unregulated letting

There is a risk that a minority of landlords bypass formal processes altogether, exposing tenants to insecure arrangements without proper legal protections.

Conclusion

The cap on rent in advance marks a fundamental change in how tenancies are agreed in England. While it removes a major financial hurdle for many renters, it also alters how landlords assess risk and select tenants.

In a market already under pressure, these shifts could reduce choice and increase competition for certain groups. Awareness of these unintended impacts is essential for landlords, agents, and renters alike. By understanding how the market may respond, all parties can adapt their approach and help ensure the transition leads to a fairer and more sustainable rental sector rather than new barriers taking their place.

The information in this post is valid to the best of our knowledge on the date of posting. It is advised that you seek independent advice based on your individual circumstances.

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