‘Rent in advance’ ban causes problems for many tenants

Two leading national estate agencies have warned the Government that its recent ban on ‘rent in advance’ requests by landlords and letting agents is causing major problems for overseas and poorer tenants.

Bosses at both LRG and Connells have made the comments independently to The Neg in recent days both saying that, although they applaud the overall thrust of the Renters’ Rights Act (RRA), the ban on rent in advance payments is having the unintended consequences many within the property industry predicted it would.

Helen Charlesworth, Chief Executive of Connells (main image, left) says that prior to the RRA going live, if a tenant had a poor credit rating, the ability to pay rent in cash in advance to your landlord was a major boon for many less affluent tenants.

But Charlesworth says she recently heard about how this practice being banned can affect ordinary hard-working renters with poor credit ratings on a personal level.

“Let me give you an example of someone I know of – a nurse working for the NHS,” she says.

“She was served a Section 21 eviction notice [prior to the Act going live] because the landlord wanted the property back and was therefore made homeless.

“The mum-of-three had previously paid her rent on time but, because she had a poor credit rating and wasn’t able to pay any rent up-front instead – despite having 12 months’ rent saved up – she couldn’t get a mortgage or access another home within the private rented sector.

“So one of our nation’s nurses is now made homeless by the Renters’ Rights Act – so this needs looking at, and we’re relaying these types of stories to our contacts in Government to try and get the message through – what’s happening now isn’t right.”

With the loss of section 21, many landlords are less willing to take a risk.”

Her comments are been echoed by Allison Thompson, Chief Lettings Officer at LRG (main image, right) who in a blog also published today , says that “the [ban] has been a particular problem for international students, who used to be able to offer several months’ rent in advance if they couldn’t satisfy all the referencing criteria.

“And with the loss of section 21, many landlords are less willing to take a risk. However, we’d suggest this can be overcome by tenants offering guarantors , which has long been a common solution for students and other tenants who struggle to satisfy financial referencing checks.”