More than 40% of letting agents remain unclear about new restrictions on rent in advance payments as the Renters’ Rights Act comes into force on 1 May, according to research from The Letting Partnership.
A survey of 887 letting agents found that 41% were unaware they are prohibited from accepting rent before a tenancy agreement is signed by all parties. A further 36% did not know that clauses requiring more than one month’s rent in advance will become unenforceable under the new legislation.
The findings suggest a significant knowledge gap within the sector, with 38% of agents admitting they currently request or accept more than one month’s rent in advance, either regularly (20%) or occasionally (18%).
Impact on tenant screening
The research indicates that rent in advance has been most commonly used for tenants with poor credit history (37%), international tenants (24%), and those without a guarantor (18%). These practices will need to change under the new framework, potentially affecting how agents assess risk and manage buy-to-let arrangements.
The Letting Partnership notes that whilst the rules do not prevent tenants from voluntarily offering rent in advance, landlords and agents cannot require or request it. Existing agreements entered into before 1 May are expected to remain enforceable.
Industry preparedness
When asked about their readiness for the changes, 44% of agents said they were only fairly prepared or worse. This included 33% who described themselves as fairly prepared, 9% not very prepared, and 2% not at all prepared.
Chris Mason, COO of The Letting Partnership, said: “What these findings show is that while the industry is aware that change is coming, a significant proportion of agents are still not fully across the details of how these rules will operate in practice.”
He added: “As rent in advance is effectively removed as a risk management tool, agents will need to rethink. Affordability checks and guarantor requirements will need to adapt, but so will the underlying client accounting processes. Ensuring rent is collected, recorded and handled correctly under the new framework is essential.”
The changes form part of wider rental sector reforms being introduced by the government, with implications for both letting agents and landlords across the UK rental market.