Rent in Advance and Upfront Costs: What You Can Still Ask for, and What’s Now Off-Limits

Any new tenancy requires upfront costs. The law has made some adjustments to limit what landlords can charge. However, the rules have changed, effective as of 1st May, 2026.

The new Renters’ Rights Act 2025 introduces sweeping changes to tenancies in the private rental sector, including what a landlord can request a tenant to pay for before the start of a new tenancy.

Find out what’s legal and what’s changed in this quick read.

Understanding the Main Upfront Costs When You Grant a New Tenancy

Rent in Advance, Tenancy Deposits, and Holding Deposits: A Landlord’s Overview

In most cases, landlords may lawfully require a holding deposit, a tenancy deposit, or rent in advance. Anything else is prohibited under current legislation.

A holding deposit reserves the property whilst the landlord checks a prospective tenant’s references and income record. This cannot exceed the equivalent of one week’s rent.

If the landlord rejects an application, the would-be tenant should receive a refund. However, they could lose a holding deposit if they change their mind about the property without good reason, give the landlord false information, or do not have the right to rent.

A tenancy deposit is different from a holding deposit and rent in advance. A tenancy deposit (sometimes also referred to as a security deposit) is the tenant’s money, which is to be returned at the end of the tenancy.

A tenancy deposit protects the landlord against costs incurred if the tenant fails to meet their contractual obligations. This might include damage to the property or unpaid rent.

The landlord must protect the money in an approved tenancy deposit scheme (TDS) within 30 days of receiving the payment, and tell the tenant which scheme the money is held in.

Currently, a landlord can request a maximum deposit of five weeks’ rent under theTenant Fees Act 2019, six weeks if the annual rent for the property is £50,000 or more.

Most landlords ask for some rent in advance before a tenant moves in.

This is more likely to be the case if the prospective tenant has a poor credit score, no references, or cannot provide a guarantor. Landlords have historically requested rent upfront where a prospective tenant has not previously rented privately in the UK.

In some circunstances, landlords will be able to ask tenants for more than one month or 28 days’ rent in advance after the tenancy agreement has been signed. Landlords can only do this if the tenancy was agreed by the local council because the teannt was legally homeless or the property will be let as social or supported housing. 

Landlords cannot require tenants to pay for credit checks or inventories, or tenancy setup fees.

Other Common Upfront Charges to Budget For

Even though landlords are restricted in what they can charge tenants, there are still upfront costs a landlord may expect to cover when starting a new tenancy.

• References and Right to Rent checks: Landlords must cover these themselves. Charging tenants for referencing, credit checks, or Right to Rent checks is prohibited under the Tenant Fees Act 2019.
• Inventory and schedule of condition: Landlords cannot charge tenants for inventories. Inventories and check-in fees are also listed as prohibited payments under the Act, meaning the landlord or agent must absorb that cost.
• Letting agent fees (where applicable): Fees that letting agents charge to landlords for services such as tenant finding or management are legitimate business costs; they cannot pass these fees onto tenants.

Upfront Payments Landlords Can Still Lawfully Request

Core Payments That Remain Legal Under Current Tenancy Fee Rules and the New Act

Under the new Renters’ Rights Act 2025, holding deposits, rent in advance, and tenancy deposits remain lawful. However, there are some changes.

Landlords can only ask for one month’s rent in advance, which is now capped under the new legislation.

Tenancy deposits are limited to one month’s rent from 1st May 2026, reducing the maximum deposit a landlord may lawfully require.

If they don’t have a deposit, a landlord can suggest deposit replacement insurance instead, also known as a zero-deposit option. This is often less expensive than a traditional deposit.

The landlord has the option to claim on the policy if they need to cover cleaning costs, damage, or rent arrears. However, the premium or fee paid is non-refundable, unlike a tenancy deposit.

Additionally, if the landlord does claim on the policy, the insurer will pay the landlord and then ask the tenant to repay the sum.

Situations Where Landlords May Ask for Extra Rent in Advance

Landlords have typically requested extra rent in advance if a prospective tenant has a restricted credit history or poor credit score, is a first-time renter, or lacks a guarantor. However, the new Act will limit landlords to just one month’s rent in advance regardless of a tenant’s status.

The new regulations about when initial rent payments are made are complex. Landlords must exercise caution not only about how much they request but also when/if they accept pre-tenancy rent payments.

Upfront Fees and Practices That Are Now Off Limits

Banned or Restricted Tenancy Fees Tenants Do Not Have to Pay

A landlord cannot charge a fee unless it is expressly permitted by law. Payments that aren’t explicitly allowed are referred to as banned fees or prohibited payments.

Most permitted payments are capped. A permitted payment that exceeds the legal limit is prohibited for amounts over the cap.

Under the Tenant Fees Act 2019, tenants are not required to pay any administrative fees, which are often presented as necessary for checking references or contract renewals.

Landlords also may not charge an inventory checking fee or the cost of credit history checks. The landlord must also absorb the costs of immigration checks.

Red Flags That an Upfront Charge May Be Unlawful

From a landlord compliance perspective, the following practices are red flags that may indicate an unlawful upfront charge:

• Rent that is higher in the first months of the tenancy before reducing to a lower amount
• Holding deposits that are higher than one week’s rent
• Rent in advance, which is higher than one month’s rent
• Tenancy/security deposits which are higher than one month’s rent

Questions Landlords Should Consider Before Asking Tenants to Pay

The laws on prohibited payments concern both the type of payment and the amount. A legitimate upfront payment may be banned because the sum is too high.

Landlords should check the Tenant Fees Act 2019 or take legal advice before requesting any upfront payment that’s not clearly permitted by law.

Frequently Asked Questions

Can a Landlord Still Charge an Inventory or Admin Fee at the Start of a Tenancy?

A landlord cannot charge an inventory or admin fee at the start of a new tenancy; these are prohibited under the Tenant Fees Act 2019. Additionally, overcharging a permitted payment to disguise an additional cost renders the overcharged element a prohibited payment.

What Happens If a Landlord Has Charged a Banned Tenancy Fee?

If a tenant has mistakenly paid a banned tenancy fee, they can request that the landlord refund it. They may put their request in writing, advising the landlord that the cost is illegal. If the landlord refuses to refund the money, the tenant may seek advice from the local council.

Is Rent in Advance Refundable if a Tenant Needs to Leave Early?

Currently, this depends on the terms of the tenancy agreement and whether a negotiated surrender agreement has been reached. Under the new Act, rent paid in advance is non-refundable if the tenant leaves early. However, if there’s a break clause and they gave the required notice, they may be entitled to a refund if the landlord finds a new tenant before their paid period ends.

Can a Landlord Ask for a Guarantor Instead of Higher Upfront Costs?

Guarantors are already commonplace for first-time renters and student accommodation. There’s an expectation that requests for a guarantor will become more common once the new legislation comes into force, as landlords are limited in the upfront charges they can impose.

Contact Helix Law for Legal Advice on Ending Tenancies and Compliance

The Renter’s Rights Act brings about significant changes to every aspect of the private rental sector. It’s already in force, and the first substantial changes are less than six months away.

The picture is evolving as different elements of the legislation are implemented, with the government yet to provide final guidance on specific areas.

Helix Law’s expert property litigation team are happy to assist landlords with any property disputes under the existing and the new regime. We act nationally and will be happy to assist you. Get in touch today.