Rent in Advance, Holding Deposits and the Bidding Ban Under the Renters' Rights Act
The 28-day initial-rent rule, no rent before signing, the ban on inviting or accepting offers above the advertised rent, and the £7,000 penalties — sections quoted.
The short answer
Since 1 May 2026 a landlord in England may take rent in advance only for the opening 28 days of a tenancy, may take no rent at all before the agreement is signed, and may not invite or accept an offer above the advertised rent. Each has a penalty of up to £7,000 from the council.
Rent in advance: what the section actually does
New section 4B of the Housing Act 1988 (inserted by s.8 of the Act) says terms of an assured tenancy “are of no effect so far as they provide for rent to be due in advance”, with one exception: initial rent, meaning rent for the first rent period or any later period that ends inside the first 28 days. So a monthly tenancy can start with the first month paid up front; six or twelve months up front cannot be required, and a clause asking for it simply does not bite. Tenancies entered into before 1 May 2026 are excepted — the rule applies to new tenancies.
Before signing: nothing
Separately, s.9 of the Act adds section 5A to the Tenant Fees Act 2019: a landlord or agent must not invite, encourage or accept a “prohibited pre-tenancy payment of rent” from a prospective tenant before the tenancy agreement exists. The holding deposit regime under the Tenant Fees Act (Schedule 1) is unchanged by the sections we read, and a holding deposit may still be applied towards the initial rent once the tenancy is entered into.
The bidding ban
| Action | Position under ss.56–57 |
|---|---|
| Advertising or offering a letting in writing | Must state a specific proposed rent (s.56(2)); a plain “To Let” board at the property is exempt |
| Inviting or encouraging offers above the stated rent | Prohibited (s.56(3)) |
| Accepting an offer above the stated rent | Prohibited — even if the tenant volunteered it (s.56(3)–(4)) |
| Letting at the stated rent or lower | Allowed |
| Penalty | Civil penalty of not more than £7,000 per breach; a further penalty for a repeat within 5 years (s.57) |
What this changes in practice
- Affordability checks replace “six months up front”. Landlords who used advance rent to de-risk a thin credit history now rely on referencing, a guarantor (what the Act says about guarantors) or rent-guarantee insurance. Our rent affordability calculator shows the income a rent implies.
- Advertise the rent you will accept. The stated figure is a ceiling on what you can take, so it should be set with comparables, not as an opening bid.
- Tax is unaffected. Rent is taxed when it is due under the cash basis; taking less in advance changes cash-flow, not the year’s taxable profit — see how rental income is taxed.
Sources, read 5 September 2026: Renters’ Rights Act 2025 s.8 (rent in advance) · s.9 (pre-tenancy payments) · s.56–57 (rental bidding) · Enforcement measures for landlords. England only; Scotland and Wales have separate tenancy law. General information, not legal advice — for a live dispute, speak to a solicitor, Shelter or your council’s housing team.
Quick answers
Not for a tenancy entered into on or after 1 May 2026: terms requiring rent in advance have no effect beyond the initial 28-day period. A tenant may still choose to pay early, but it cannot be required.
A landlord or agent must not invite, encourage or accept an offer above the stated rent, whoever suggested it. The penalty is up to £7,000 per breach.
Section 4B excepts tenancies entered into before commencement. It applies to new tenancies from 1 May 2026.
Yes — the Tenant Fees Act 2019 holding-deposit rules were not amended by the sections reviewed, and a holding deposit can be applied to the initial rent once the tenancy is entered into.
Sources
The primary documents this page is built from. Links checked 5 September 2026.
- Renters' Rights Act 2025 s.8 — rent in advance — legislation.gov.uk
- Renters' Rights Act 2025 s.56 — rental bidding — legislation.gov.uk
- Enforcement measures for landlords: Renters' Rights Act 2025 — GOV.UK / MHCLG