The Renters’ Rights Act has made landlords more cautious about accepting tenants with unconventional finances because it limits how much rent they can ask for in advance.
Mo Kanso, managing director of estate and letting agent Landstones, says the changes are already affecting which tenants landlords are prepared to accept. Applicants with regular UK salaries and straightforward references are being favoured over those with less conventional finances, even if they have substantial savings or access to family funds.
He wants the government to review the restrictions, which he believes fail to distinguish between landlords demanding large payments and applicants offering them voluntarily.
“I think there’s an important distinction between a landlord ‘demanding’ twelve months’ rent and a financially capable applicant ‘choosing’ to offer additional security,” he wrote on LinkedIn.
Landlords turning applicants away
The National Residential Landlords Association had warned in March 2025 that restricting advance payments could shut out otherwise suitable applicants, particularly overseas students and self-employed people.
Goodlord’s State of the Lettings Industry Report provides further evidence of the problems highlighted by Kanso. Its survey found 26% of landlords said the ban on rent in advance had made them more likely to reject applicants they would previously have accepted, and 31% said they were more prepared to leave a property vacant until a lower-risk tenant came along.
And, more recently, senior figures at Connells and LRG have reported similar problems following the Act’s introduction.
According to Kanso, the difficulty is particularly acute for international students, business owners and self-employed professionals. Their finances may be sound, but a lack of UK credit history or a regular salary can make conventional referencing difficult.
“Increasingly, the answer from landlords is simply: ‘I don’t want to take the risk,’” he says.
The rules
Since 1 May 2026, landlords in England have been prohibited from asking for or accepting rent before both parties have signed the tenancy agreement. After signing, they can normally request only the first month’s rent before the tenancy begins. They can also take a separate refundable tenancy deposit, capped at five weeks’ rent for annual rents below £50,000, or six weeks for annual rents between £50,000 and £100,000.
Previously, tenants who struggled with referencing could offer six or 12 months’ rent upfront, which provided landlords with reassurance over the security of their rental income. That can no longer be used as a condition of the tenancy.
Once a tenancy has started, tenants can choose to pay several months’ rent at once, but landlords cannot require them to do so. Kanso says this comes too late. He wants prospective tenants to be able to offer a larger payment voluntarily before the tenancy is agreed, but without giving landlords the right to demand it.
Managing the risks
To mitigate their risks, landlords can still assess savings, dividends and other sources of income, check references and ask for a suitable guarantor, usually a relative or friend who agrees to cover unpaid rent.
Applicants without a suitable guarantor can choose to use a professional guarantor company instead. These companies guarantee the rent if a tenant defaults, but charge a fee that can amount to several weeks’ rent and is usually non-refundable.
Rent guarantee insurance offers another potential safeguard against arrears. As BuyAssociation has previously reported, insurers have been adapting their cover to the Renters’ Rights Act, including longer rent protection periods and enhanced legal expenses cover.
However, cover is subject to the insurer’s eligibility and referencing requirements, so it is important to check whether an applicant with an irregular income or limited UK credit history would qualify.
Although the changes proposed by Kanso would probably be welcomed by landlords and some prospective tenants, it remains to be seen whether there is any appetite for revising the Renters’ Rights Act. So far, Labour have shown little sign of doing so.
