Recent changes in tenancy law, specifically the Renters’ Rights Act 2025, have introduced restrictions on landlords requesting rent in advance. This raises questions for landlords when considering tenants who have no current income but possess substantial savings and investments. Understanding how to assess such applicants is crucial for landlords aiming to maintain secure and compliant tenancies.

Understanding the Impact of the Renters’ Rights Act 2025

The Renters’ Rights Act 2025 has outlawed the practice of requiring rent payments in advance beyond the initial deposit and first month’s rent. This legislative change aims to protect tenants from excessive upfront financial demands but also limits landlords’ traditional methods of mitigating risk.

For landlords, this means that tenants who might previously have demonstrated financial stability by offering multiple months’ rent upfront can no longer use this as a guarantee of affordability. Instead, landlords must rely on other means to assess tenant suitability.

Tenants With No Income but Large Savings

A recent query from a landlord highlights a common scenario: a tenant who has ceased paid employment but holds significant investments and savings. This tenant wishes to rent rather than purchase property, anticipating a potential move abroad within five years. Despite financial security through assets, the tenant is concerned that without a regular income, landlords may require a guarantor or reject the application outright.

Landlords often seek evidence of income to ensure ongoing rent payments. However, tenants with substantial savings can demonstrate financial capability differently. The challenge lies in verifying these assets and assessing their reliability as a source of rent payments.

How Landlords Can Approach Such Applications

Landlords and letting agents should consider adopting flexible yet thorough vetting processes. This may include:

• Requesting bank statements or investment portfolio summaries to verify savings and liquid assets.
• Seeking professional references from financial advisors or accountants who can confirm the tenant’s financial standing.
• Considering a shorter tenancy term aligned with the tenant’s plans, such as a fixed-term lease of up to five years.
• Using tenant screening services that specialise in assessing applicants with non-traditional income sources.

While guarantors are a common fallback, they may not always be necessary if the tenant’s financial position is clearly documented and reliable.

Implications for Landlords and Agents

Landlords must balance compliance with the Renters’ Rights Act 2025 and the need to minimise rental risk. This requires updated knowledge of legal requirements and innovative tenant assessment methods. By recognising that income is not the sole indicator of affordability, landlords can expand their pool of prospective tenants while maintaining financial security.

Agents play a key role in advising landlords and facilitating the collection of appropriate financial evidence. Clear communication with tenants about documentation requirements and legal constraints will help streamline the application process.

Looking Ahead: Support for Landlords

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This initiative will feature verified and approved service providers tailored to support landlords, tenants, and property management businesses. The Hub will include legal, trades, insurance, financial, mortgage, tenant screening, and other relevant services.

Landlords and agents interested in accessing these resources or service providers wishing to register can find further information at the Landlord Association’s website.