Another important change under the Renters’ Rights Act is the introduction of a cap on rent in advance, which will limit how much landlords can request from tenants before a tenancy begins.

This reform is aimed at making renting more accessible and reducing the financial pressure on tenants at the start of a tenancy.

What is rent in advance?

Rent in advance is the payment made by a tenant before moving into a property, usually covering the first rental period.

In many cases, this has simply been one month’s rent paid upfront. However, in more competitive markets or where tenants may not meet certain affordability criteria, some landlords have requested several months’ rent in advance as a form of security.

While this can offer reassurance to landlords, it can also create significant financial barriers for tenants.

What’s changing under the Renters’ Rights Act?

Under the new legislation, rent in advance will be capped at one month’s rent.

This means landlords and letting agents will no longer be able to request multiple months’ rent upfront as a condition of securing a property. The intention is to create a more level playing field and ensure tenants are not required to commit large sums of money before moving in.

Although tenants may still choose to pay rent in advance voluntarily at a later stage, landlords will not be able to demand it as part of the initial agreement.

How will this affect landlords?

For landlords, this change removes a tool that has sometimes been used to reduce risk, particularly when dealing with tenants who may not meet standard referencing criteria.

Without the option to request several months’ rent upfront, landlords will need to rely more heavily on thorough referencing, affordability checks and overall tenant suitability.

This makes the initial selection process more important than ever, as landlords will need confidence in a tenant’s ability to meet ongoing rental payments rather than relying on upfront security.

What does this mean for tenants?

For tenants, the cap on rent in advance is likely to make renting far more accessible.

Large upfront payments have often made it difficult for tenants to secure a property, particularly for first-time renters or those without significant savings. Limiting rent in advance to one month reduces the initial financial burden and allows more people to enter the rental market.

It also creates a fairer system, where tenants are assessed based on their suitability rather than their ability to pay large sums upfront.

Why this change matters

This reform is part of a wider effort to improve fairness and transparency within the rental market.

By capping rent in advance, the legislation aims to prevent situations where tenants are effectively priced out before they even move in. At the same time, it encourages landlords to adopt more consistent and sustainable approaches to tenant selection.

While it may require a shift in mindset for some landlords, it ultimately supports a more balanced and stable rental environment.

The importance of proper tenant referencing

With less reliance on upfront payments, the focus naturally shifts towards finding the right tenant from the beginning.

Carrying out thorough referencing, understanding a tenant’s financial position and assessing long-term suitability all become key factors in ensuring a successful tenancy.

Getting this stage right reduces the risk of arrears and helps create a more stable and reliable rental arrangement for both parties.

Need advice on managing these changes?

At Seths Estate Agents, we support landlords across Leicester in adapting to new legislation while protecting their investment.

From tenant sourcing and referencing to full property management, we ensure your property is let efficiently, compliantly and with the right tenants in place.

If you are currently self-managing or working with another agent, now is the time to review your approach and make sure you are prepared for the changes ahead.

📞 Call our team on 0116 266 9977 for expert property management.