Landlords will soon be banned from asking for more than one month's rent upfront
To cover significant rent and upfront payment fees, it will soon be illegal for landlords to ask for more than one month's worth of rent.
Six weeks' worth of rent can now be prepaid as a deposit, which is a significant relief for tenants who often struggle to come up with a substantial amount of money after signing a new lease agreement.
reaching an astonishing $2,800
And with many people belonging to Gen Z and Millennials being referred to as 'Generation Rent' due to unaffordable, extremely expensive homes, it's possible that without inherited wealth, we may never be able to own a house, leaving us stuck with paying thousands of dollars to landlords every year.
A study showed that nearly one in six private renters (approximately 1.2 million people) were having to turn to credit to pay their living expenses.
When asked to cover several months' worth of costs in one lump sum, it could either deplete our entire savings or force us to take on significant debt obligations.
.
'Our renters' rights bill will fundamentally change the rights of 11 million private renters, bringing an end to rent competition and eliminating 'no cause' evictions, making the rental system more equitable and providing renters with greater security, stability, and safeguards.'
A new law may drastically alter the dynamics of renting in cities like London, where potential renters often engage in a fierce bidding war to secure a livable and affordable apartment, frequently seeing rivals offer substantial deposits in an effort to secure it.
For working-class and low-income individuals who don't have the financial safety net of inherited wealth or savings, and for those without a UK guarantor, searching for a new home can be a daunting task.
Ceylin Cakar moved to the UK from Turkey in 2018, but in August 2023, she found herself in a dilemma. She needed a UK-based address to extend her visa by September 2023, but since she had just moved out of her previous flat, her new temporary accommodation wasn't going to be ready for her to use as her official address - at least not yet. To make matters worse, she had to return home to visit her family for a few days, leaving her searching for an alternative UK address to meet the deadline.
Upon her return to London, she found herself with nowhere to live, and the sense of crisis was intensifying.
Latest London news
With just a month left until her visa application was due, she was desperately searching for a place to live, a daunting task during the peak season when many students and new graduates alike are on the hunt for new places to rent.
.
I wasn't in the right mindset to make an informed decision, so I ended up seeking out this agency without doing my due diligence on them. It turned out they were a suspicious company.
As a freelancer, my income can vary greatly from one month to another, making it less predictable. The bank expressed concern over my financial records, and they advised that I either find a UK guarantor or pay six months' worth of payments upfront to secure a loan.
Since Ceylin didn't have a qualified guarantor in the UK, she had to visit her parents and ask to borrow $8,400 – the amount needed to pay six months' worth of rent – within the coming week.
She found it hard to ask for that much money on short notice, as her savings weren't enough. Fortunately, her parents were able to step in and help by lending her the money, although it was a pressing process to secure it so quickly.
Upon arrival, she was assigned to an incorrect apartment, and the apartment was so disorganized that the rental agency was forced to relocate her to a different unit temporarily – although the second one wasn't significantly better.
She describes the stove as being out of order, incredibly grimy, and with expired food stored in the cupboards.
I was showering at my gym almost every day and also staying at my friend's place often, but I wasn't even setting foot in my flat despite having already paid the rent.
‘It essentially locked me into a contract that I was unable to withdraw from. Since I had already paid for six months, I was obligated to continue.’
Ceylin naturally welcomes the policy change news.
Imagine being an international person from a low-income background, arriving in a new country where you know no one and nothing about the culture - it's a very isolating and vulnerable experience.
Ceylin isn't alone. In Camden, when Nell Mead rented a flat, she was required to make a year's worth of rent payments upfront, equaling a staggering $31,200, with the monthly rent being $2,600.
A woman named Nell, who is 47 and a physiotherapist in East London, recalls spending two years in a place she was living, eventually succeeding in negotiating a shorter lease for the second year, resulting in a length of only six months.
I was forced to move out when my landlord's mortgages on his family home and the place I was renting skyrocketed at the same time. Since I had been renting for two years, I understood it was the end of our tenancy, and although it was sad, I accepted it.
After moving out, Nell was asked again to pay a year's worth of rent up front for an apartment in Leytonstone. The new total was an astonishing £34,800, which works out to almost £2,900 per month. Later, when Nell signed a new lease for a second year, she was able to successfully negotiate the rent down to just six months' worth at £17,400.
She was initially informed that she could rent it for 3-5 years, but after 14 months, she unexpectedly received a Section 21 notice with no explanation, even though she had just paid rent for 6 months in advance.
‘It turned out my landlord had lost his wife, and I'm okay with him getting his home back. However, the letting agency held onto my rental overpayment and security deposit for several months. They were incredibly difficult to work with.’
A trade union that collaborates with tenants to address issues such as unauthorized evictions and substandard housing conditions.
.
The nation is facing a severe housing shortage, with soaring rents and a scarcity of affordable housing units leaving millions deeply troubled. Individuals with limited financial resources, young families, and those receiving government benefits are among the groups most severely affected. They are often expected to pay several months' rent in advance, a hefty sum that is impossible for many to cover.
‘ACORN has long advocated for this issue, and we're encouraged by the government's effort to address it. The Renters' Rights Bill has the potential to make a significant positive impact on renters, but we'll continue to push forward until everyone can afford a safe and decent place to live, leading to a happier and more healthy lifestyle.’
Will the new law be effective?
So, why can landlords get away with requesting such large deposits until now?
Landlords often withhold these large deposits to feel more secure when, for instance, tenants do not have a guarantor from the UK.
To address problems with tenants having bad credit or renting to international individuals, landlords will sometimes demand upfront rent as an added layer of financial protection, which can total as much as half a year's rent.
We'll just have to wait and see how this all plays out, and find out if landlords actually start paying attention to the specifics.
These reforms will create a situation where tenants should ideally have more choices when it comes to renting properties, since they won't have to compete with potential renters who can pay a large sum of money upfront.
While landlords have the ability to pick and choose their tenants, it's uncertain whether these changes will ultimately achieve the intended outcome.
Would you like to hear a story?
.
Post a Comment for "Landlords will soon be banned from asking for more than one month's rent upfront"