A new law could stop landlords from demanding ‘extortionate’ up-front payments from new tenants. A proposal, which would make it unlawful for a landlord to request or accept more than a month’s rent in advance, has been welcomed by campaigners – but criticised by some in the property sector.
The Renters’ Reform Coalition has condemned the “extortionate” upfront costs traditionally required from renters prior to taking on a new lease, saying this has discriminated against less wealthy tenants for ‘too long’.
But the National Residential Landlords Association has voiced concerns that such restrictions could pose a risk to landlords if tenants cannot show other means of ensuring they can pay rent regularly.
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Tom Darling, director of the Renters’ Reform Coalition, expressed approval for government action, stating: “For too long, extortionate rent-in-advance demands have allowed landlords to discriminate against poorer renters – it’s great the Government have acted on this and listened to renter groups by setting out clearly that this practice will be prohibited.”
On the other side, the NRLA insists on clarifications on how tenants with variable income or international students, who may have trouble showing their ability to maintain payments, will manage under these new regulations.
The Renters’ Rights Bill is due back before the Commons for report stage on January 14 -Credit:PA Wire/PA Images
Chris Norris, NRLA policy director, underscored the impact of government decisions on landlords and tenants, saying: “The Government is cutting off any assurance responsible landlords might seek when renting to those who cannot easily prove their ability to sustain tenancies and pay their rents. In the end, those who will suffer most are those the Government most wants to help.”
“Ministers must provide clarity on how tenants unable to easily demonstrate their ability to afford and sustain their tenancies should do so. Expecting landlords to take on high levels of risk without practical assurances is not a sustainable solution and risks further exacerbating the challenges in an already constrained market.”
Propertymark, the professional body for property agents, also chimed in regarding the proposed measures. Timothy Douglas, head of policy and campaigns, highlighted the complexity of rental payments: “There are a wide range of circumstances and scenarios that impact how people pay their rent, for instance some renters are on fixed incomes, not all tenants pass referencing and affordability checks, and some have insecure incomes due to their work arrangements.”
He then called upon the UK Government to consider the implications of broad policies: “The UK Government must do more to understand why rent in advance is used by both landlords and tenants, and avoid one-size-fits-all policies that mean some tenants may no longer be able to access private rented property.”
The Renters’ Rights Bill is set to enter the next phase of parliamentary scrutiny as it returns to the Commons for report stage on January 14.