The government has promised to monitor the impact of landlords charging tenants up to six months’ rent in advance.
MP Tan Dhesi raised the issue in Parliament by asking what plans it had to restrict the number of months’ rent landlords can request upfront and what assessment it had made of the effect on private tenants.
Under-Secretary for Housing, Eddie Hughes, said it was up to landlords and tenants to agree the amount of rent that should be charged and how much should be paid in advance, according to individual circumstances.
He said: “We do not expect it to be the norm that landlords ask for multiple months of rent in advance,” but he added: “We have not assessed the impact…but will continue to monitor this closely.”
Housing Hand, the UK’s largest guarantor service, says landlords need upfront rent as security against international students defaulting on their rent as during the past eight years it has seen thousands of them not even turn up for their tenancy. Group MD Jeremy Robinson (pictured) says the same goes for international working professionals who have no credit history.
He tells LandlordZONE: “Some landlords and letting agents will require a UK tenant to pay rent upfront, more often than not, this is no more than three months’ rent in advance.
“Such UK tenants must have failed a credit check and do not have a UK individual to stand as their guarantor. Companies like Housing Hand can provide a guarantor for both international and UK tenants.”
According to OpenRent, of the 1750,000 properties it let last year, in 95% of cases, tenants had to provide one month’s rent upfront but of the 9,000 cases where more than one month was required, nearly a quarter asked for six months.