MPs back one-month cap on advance rent payments
UK MPs have voted in favor of a new one-month cap on prepaid rent in England as the Tenants’ Bill of Rights is set to become law.
On Tuesday, Housing Secretary Matthew Pennycook confirmed the addition of a clause to stop landlords paying upfront in the House of Commons.
Landlord groups warned the move could put landlords at risk if tenants have no other way of proving they can continue to pay rent.
Independent MP Jeremy Corbyn warned that some tenants would be evicted before a package of protections in the bill, including a ban on “no-fault” evictions, comes into force this summer as expected.
Setting out the details of the cap in the House of Commons, Pennycook said the government wanted to end requirements for “large upfront rent payments”, which he said could sometimes be equivalent to 12 months’ rent.
Tenants who are “fully able to afford the monthly rent” are being asked to pay “a larger amount” to their landlords up front or “risk not being able to rent at all,” he said.
The latest move comes on top of existing measures aimed at stopping bidding wars for homes, “where desperate tenants often compete with each other so landlords can get the highest possible payments”.
Shadow housing secretary David Simmonds said the bill had “a number of shortcomings” and would raise “concerns about the availability and affordability of housing in the private rented sector”.
A coalition of groups representing landlords and leasing agents claimed caps on upfront payments could leave tenants unable to demonstrate their ability to pay rent.
The groups, which include the National Residential Landlords Association (NRLA), said: “It is neither practical nor responsible to cut off any guarantees that landlords may seek when renting to people who cannot easily demonstrate their ability to afford rent.”
But some MPs, including Green Party co-leader Kara Denyer, have called on the government to take further steps to introduce rent controls.
The Bristol West councilor said the high cost of renting was keeping people “on the streets” so “rent controls are still needed – because having rights to things they can’t afford or have access to doesn’t help anyone”.
Labour’s Bell Ribeiro-Addy, a tenant and MP for Clapham and Brixton Hill, said rent rises should be capped because “I haven’t heard one yet Compelling reasons why landlords should see their incomes grow faster than people actually working “to make a living”.
Former Labor leader Corbyn said evictions were taking place before the protections were introduced, saying: “There appear to be a lot of landlords using unreasonable arguments to end leases or raise rents before this legislation was introduced”.
Pennycook acknowledged there was “a lot of bad practice in the industry” that the government was keen to clamp down on, and admitted there could be “retaliatory economic no-fault evictions” during the transition period.
However, he drew a line at rent control, saying there was evidence the measure could harm tenants.
He said: “Once Section 21 (‘no-fault’) evictions are abolished, unscrupulous landlords will undoubtedly try to evict tenants who are asserting their rights by extorting rent increases.”
However, he added that “the government sincerely believes that introducing rent controls in the private rented sector could harm tenants and landlords through reduced supply and discourage investment”.
Polly Neate, chief executive of housing charity Shelter, welcomed the new cap on upfront payments but urged the government to further rein in rent rises.
She said: “For years, renters have been forced to pay eye-watering sums up front or have their hopes of housing evaporated.
“With beneficiaries almost twice as likely to be prevented from renting due to prepayment of rent, the government is absolutely right to use the Tenants’ Bill of Rights to curb this discriminatory practice.
“To truly make rentals more secure and affordable, the bill must limit rental rent increases based on inflation or wage increases.”
The bill received the support of a majority of MPs at third reading and will now go before the House of Lords.
