Charities warn renters not protected from large upfront payments

Renters could still face demands for large upfront payments, charities are warning, despite a Labour election promise to cap the amount landlords can ask for in advance.

The Renters’ Rights Bill, which bans Section 21 or “no fault” evictions, will be debated by MPs for the first time on Wednesday.

But the bill does not mention Labour’s election promise to “end massive upfront payments” that landlords can demand.

Some landlords ask for several months’ rent in advance at the start of a contract.

A housing department spokesperson said the government was confident the new law would protect tenants from such practices.

The government is understood to believe that overhauling rental contracts so they are on a rolling one-month basis – rather than fixed term – will stop landlords from asking for more than three months’ rent in advance.

But legal advice received by Shelter and other housing groups disputes this.

Polly Neate, chief executive of Shelter, said there nothing in the bill “to prevent landlords from demanding tenants either cough up huge sums of rent up front or hit the road”.

“These renters need bold action, no ifs, no buts. 

“The Renters’ Rights Bill must crack down on these unreasonable demands like huge upfront sums of rent and high-earning guarantors that drive homelessness.”

Ministers are understood to be aware of the concerns and are considering if changes are needed.

Labour promised to cap the amount of rent a landlord could demand upfront during the election campaign, but did not define the level of advance payment they considered appropriate. The housing minister, Matthew Pennycook, who was then shadow housing minister, said landlords shouldn’t be allowed to demand more than five weeks’ rent for most tenancies.

Analysis by Shelter, shared with BBC News, suggests more than 800,000 private renters have not been able to rent a home in the last five years because they could not afford the rent in advance.

A spokesperson from the Ministry of Housing, Communities and Local Government (MHCLG) said: “Landlords should not price people out of homes by requesting large amounts of rent in advance.

“We’re confident that the Bill provides adequate protection against such practices and we will continue to ensure action is taken where necessary”.

Deputy Prime Minister Angela Rayner will address the Commons on Wednesday before a debate on the bill.