No More Rent in Advance: The Guarantor Problem the Renters’ Rights Act Created — and How Landlords Are Solving It

The old workaround — six or twelve months upfront — is now unlawful. Here’s what replaces it.

Until 1 May 2026, a landlord unsure about a tenant — no UK credit history, self-employed, relocating from abroad — had a simple tool available: ask for several months’ rent upfront, sometimes a full year, and skip the guarantor conversation altogether. Under the Renters’ Rights Act 2025, that tool has gone. What hasn’t gone is the underlying risk landlords were managing, which means the practical question now is not “can I still do this” but “what do I do instead.”

The Rule, Precisely

The Renters’ Rights Act 2025 amends the Tenant Fees Act 2019 and the Housing Act 1988 to restrict upfront rent payments for tenancies in England. Two provisions work together:

• Section 9 prohibits a landlord or agent from inviting, encouraging, or accepting any rent payment before the tenancy agreement is signed
• Section 8 renders any tenancy term requiring rent to be paid in advance during the tenancy of no legal effect

The combined effect, in force from 1 May 2026, is a hard cap: a landlord cannot require or accept more than one month’s rent in advance (28 days, pro rata, for a weekly tenancy), regardless of the tenant’s circumstances. Requesting or accepting a prohibited payment is a civil offence — penalties for a first breach run into several thousand pounds, escalating sharply for a repeat breach within five years, with criminal prosecution available as an alternative in serious or repeated cases. Transitional rules apply to tenancies already running before the commencement date, and the treatment of fixed terms converting to periodic tenancies around that date is a live area of uncertainty — worth checking against the specific tenancy timeline rather than assumed.

Why This Creates a Guarantor Gap

Advance rent and guarantors were, in practice, substitutes for each other. Landlords typically asked for one or the other, not both, and tenants without a UK-based guarantor — international students, recent arrivals, people with thin credit files — used advance payment specifically because they had no one to stand behind them. Industry data suggests roughly one in five renters used an advance payment for exactly this reason. With that route closed, the same tenants who previously paid their way around the guarantor requirement now need to satisfy it directly — at the same time as every other landlord in the market is reaching for the same solution.

Guarantors Themselves Are Also Changing

It’s worth noting that guarantor arrangements haven’t stood still either. Under the same Act, a guarantor’s liability now ends on the tenant’s death — previously a guarantor could remain liable for rent accruing after the tenant died, which is no longer the case. A guarantor arrangement itself does not breach the one-month advance-rent cap: liability is triggered by default during the tenancy, not by any upfront payment, so a landlord can lawfully combine a one-month advance payment with a guarantor requirement for the same tenancy.

The Practical Alternatives

In place of extended advance rent, landlords are converging on a small number of lawful alternatives, usually combined rather than used alone:

• A UK-based personal guarantor — still the cheapest option where a tenant has a friend or family member willing and financially able to stand behind the tenancy
• A professional guarantor service — a paid third-party provider acts as guarantor for tenants without a suitable personal one, typically at a cost to the tenant of a percentage of annual rent
• Rent guarantee insurance — taken out by the landlord, covering default risk directly rather than relying on recovering money from a guarantor after the fact
• Enhanced referencing — using overseas employment records, bank statements, and visa or right-to-work documentation to build an affordability picture where a UK credit file doesn’t exist
• The deposit, unaffected by this change — still capped separately under the Tenant Fees Act at five weeks’ rent (six weeks where annual rent exceeds £50,000), and remains available in full alongside any of the above

Structuring a Compliant Letting

For a landlord assessing a higher-risk tenant under the new rules, we’d suggest working through the following in order, rather than defaulting to whichever tool was used last time:

• Confirm the one-month cap applies to the specific tenancy — check the commencement date and whether any transitional treatment is relevant
• Decide whether a personal guarantor is realistically available before paying for a professional service or insurance product
• Where insurance is used, check what it actually covers — policies vary significantly on notice periods, excess, and whether legal costs of recovery are included
• Document the referencing basis clearly, particularly for overseas tenants, so the file supports the decision if it’s later challenged
• Take the deposit in full alongside whichever guarantor or insurance solution is used — there is no reason to leave that layer of security unused

Svetlova LLP advises landlords and tenants on tenancy structuring under the Renters’ Rights Act 2025, including compliant advance-rent and guarantor arrangements, and represents clients in related disputes.

This article is for general information only and does not constitute legal advice. It reflects the law in England as at July 2026; Wales, Scotland, and Northern Ireland have separate regimes. For advice on a specific tenancy, please contact us directly.