A PropTech chief wants MPs to think again about restricting tenants being asked to pay upfront rent ahead of the start of tenancies. 

Amendments tabled to the Renters Rights Bill by the government suggest there may be restrictions on the amount of rent that can be sought in advance of a tenancy.

The I newspaper says agents and private landlords will be banned from asking tenants for several months’ of rent payments in advance. 

Now The Lettings Hub, a PropTech firm, says that 15% of tenants paying the highest rental amounts – £5,000 and above – rely on paying rent in advance. It is likely that this trend is driven by overseas students, where the tenant may be unable to secure a UK-based guarantor. 

Additionally, self-employed tenants with fluctuating incomes often use advance payments to demonstrate their financial reliability and secure a home. 

Meanwhile, just 6% of tenants paying £1,000 or less per month in rent choose to make their rental payments in advance. 

The Lettings Hub suggests that this is therefore not a widespread practice forced upon tenants. Instead, it claims this is a valuable option used by a minority to secure a property which is suitable for their unique circumstances. 

Across all rental price bands, just 7% of tenancies begin with an upfront rental payment of more than four months’ rent. This figure has not changed significantly in the three years that The Lettings Hub has been tracking the data.

Heidi Shackell, chief executive, says: “The government must not underestimate the potential impact to tenants if rent in advance is banned. As can be seen in the data, the majority of tenants do not use this option, but for those who do, it could be the difference between securing a home or being excluded from the private rental sector altogether. 

“We urge those on the committee making these vital decisions to study the data to ensure this option remains for tenants who benefit from this practice.”

The Renters Rights Bill will return to the House of Commons for its Report Stage and Third Reading in the House of Commons on Tuesday, before moving to the House of Lords for further scrutiny.