The Renters’ Rights Act, coming into effect on 1 May 2026, introduces significant changes to the rules surrounding rent in advance. These reforms aim to protect tenants from paying rent before a tenancy agreement is signed and restrict landlords from demanding more than one month’s rent upfront. Landlords and letting agents must adapt to these new regulations to remain compliant and avoid penalties.

New rules on pre-tenancy rent payments

Under the Renters’ Rights Act, landlords are prohibited from collecting rent before both parties have signed the tenancy agreement and it has become legally binding. Previously, rent was considered a permitted payment under the Tenant Fees Act 2019, but from 1 May 2026, any rent taken prematurely will be classified as a prohibited payment. Breaching this rule may result in fines imposed by local authorities.

This ban applies to any rent requested or accepted before the tenancy officially begins. Holding deposits and tenancy deposits remain exempt from this restriction; a holding deposit can still be used towards the first rent payment once the tenancy has started and within the permitted timeframe.

Tenants cannot voluntarily pay rent in advance before the agreement is signed, nor can landlords accept or encourage such payments. The Act includes anti-avoidance measures preventing landlords and agents from circumventing the rules through third parties or guarantors. Failure to comply risks financial penalties.

Changes to the first month’s rent or initial rent

The Act also alters how landlords can request the first month’s rent, known as the “initial rent.” This payment covers the first rental period or any period ending within the first 28 days of the tenancy. The new rules allow landlords some flexibility to shorten this initial period—for example, to align rent payments with a tenant’s payday or to standardise payment dates across multiple properties.

However, landlords can no longer extend the initial rent period beyond a calendar month. Rent must be charged on a monthly basis after the initial period. Importantly, landlords cannot request the initial rent before the tenancy agreement is signed, but they may collect it during the permitted pre-tenancy period, which begins once the agreement is signed and ends the day before the tenancy starts.

Clauses requiring rent payments for longer than one calendar month, such as quarterly or termly payments, will be invalid for new tenancies commencing after 1 May 2026. Existing agreements are unaffected. Landlords must carefully time requests for the initial rent to avoid breaching the new rules.

The recommended sequence for rent collection is: tenant pays a holding deposit (no more than one week’s rent), referencing is completed, tenancy agreement is signed by both parties, tenancy deposit is paid, then the landlord requests the initial rent within the permitted period. Tenants move in on the agreed start date.

A potential challenge is that if the tenant does not pay the initial rent before moving in, the landlord may still be legally obliged to allow possession, possibly resulting in unpaid rent from day one. Further guidance is expected as the Act’s implementation approaches.

Managing lump-sum rent payments

The Act prohibits landlords from including terms in tenancy agreements that require tenants to pay rent in advance beyond the initial rent. This means landlords can no longer demand large lump-sum payments, such as six months’ rent upfront, a practice common when letting to students or tenants without a UK rental history.

These restrictions apply only to new tenancies created after 1 May 2026. Existing agreements with such clauses remain valid. While landlords may request lump-sum payments after the tenancy agreement is signed, tenants are under no obligation to agree, and landlords cannot make tenancy conditional on such payments.

Any rent paid in advance must correspond to specific rent periods. If it does not, it may be treated as a tenancy deposit, which is capped at five weeks’ rent under the Tenant Fees Act. Exceeding this cap constitutes a legal breach.

Frequently asked questions

Can tenancy agreements require rent to be paid in advance?
No. The Renters’ Rights Act renders any clause requiring rent payment before the start of a rent period unenforceable, though such clauses do not breach the Tenant Fees Act.

What counts as rent due in advance?
Rent is due in advance if requested before the start of the period it covers. For example, rent for 26th of one month to 25th of the next cannot be demanded before the 26th.

Can landlords accept early rent voluntarily paid by tenants?
Yes. If a tenant chooses to pay rent early after the tenancy agreement is signed, landlords may accept it without breaching the Tenant Fees Act.

Will tenants still be able to pay rent in advance under the new rules?
Yes. Once the tenancy agreement is signed, tenants may pay rent in advance voluntarily, but landlords cannot impose this as a condition.

What happens if a tenant pays rent before the tenancy is signed?
Any rent paid before the tenancy agreement is signed is a prohibited pre-tenancy payment and must be returned immediately by the landlord to avoid legal breach.

What this means for landlords

Landlords must review and update their tenancy agreements to remove any clauses requiring rent payments before the tenancy starts or for periods longer than one month. They should also adjust their rent collection processes to ensure payments are only requested after the tenancy agreement is signed and within the permitted pre-tenancy period.

Failure to comply with these new rules risks financial penalties and potential reputational damage. Landlords who traditionally rely on taking several months’ rent upfront, such as those letting to students or tenants without rental history, will need to adapt their approach and consider alternative risk management strategies.

Staying informed and prepared ahead of the 1 May 2026 implementation date will help landlords navigate these changes smoothly and maintain compliance with evolving rental legislation.

Source: Based on reporting from OpenRent

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