New Rules for Rent in Advance & Deposits Explained for East London Landlords

The Renters’ Rights Act 2025, which came into force on 1st May 2026, has changed rent in advance and deposit rules. Landlords in East Ham and Manor Park agreeing new tenancies will need to adjust how they set up tenancies and accept payments of rent.

What Has Changed for Landlords Under the Renters’ Rights Act?

The Renters’ Rights Act 2025 has paved the way for a very different private rented sector. While headline reforms included the ban of Section 21 ‘no fault’ evictions, and assured periodic tenancies automatically replacing assured shorthold tenancies, the Act has radically changed rent in advance and deposit rules.

Our periodic tenancy guide explains the Renters’ Rights Act 2025 in more detail but in this article, we’re focusing on new rent in advance and deposit rules.

Have Tenancy Deposit Caps Changed?

The amount allowed for a security deposit is unchanged – still capped at 5 weeks’ rent where annual rent is under £50,000, and 6 weeks’ rent where annual rent is £50,000-£100,000. What has changed are the drawbacks when a landlord doesn’t safeguard a tenant’s deposit correctly.

Deposit Protection: What Landlords Must Still Do

East London landlords still need to protect a tenant’s deposit in a Government-approved scheme (DPS, MyDeposits or TDS) and serve the tenant the prescribed information within 30 days of receiving the deposit.

As a reminder, prescribed information must include:

• the address of the rented property
• how much deposit has been taken
• how the deposit is protected
• the name and contact details of the tenancy deposit protection scheme and its dispute resolution service
• the landlord’s (or the letting agency’s) name and contact details
• the name and contact details of any third party that’s paid the deposit
• why the landlord would keep some or all of the deposit
• how a tenant can apply to get the deposit back
• what to do if the tenant cannot get hold of the landlord at the end of the tenancy
• what to do if there’s a dispute over the deposit

What Happens If a Deposit Dispute Arises?

Deposit disputes usually arise at the end of a tenancy when a landlord wants to withhold some or all of the tenant’s deposit. A tenant has the right to challenge any deposit deduction they think is unfair. Their first port of call is the free adjudication service offered by whichever scheme has protected their deposit.

If there is no resolution, a tenant can take the matter to a county court and claim fees back from the landlord if they win. Preventing any deposit disputes is the best recourse and we explain best practice in our tenancy deposit dispute guide.

Why Deposit Compliance Matters More Than Ever

Under the old rules, landlords who didn’t protect a tenant’s deposit correctly could face a fine of between one and three times the deposit amount. Despite this penalty, the landlord could still evict a tenant using a Section 21.

The Renters’ Rights Act 2025 has changed this. With Section 21s banned and rules tightened, landlords who don’t protect tenant deposits in a Government-approved scheme may lose their right to eviction.

This is because most Section 8 eviction grounds are only valid if a landlord has served the prescribed information in the set timeframe. Miss the deadline and a landlord could be barred from regaining possession. The same is true if the landlord hasn’t protected the deposit correctly.

And the fines haven’t gone away either. A court can still award a tenant compensation to the value of one to three times the deposit amount in cases where a deposit has been protected late or not at all.

Landlords who request illegal rent in advance will also be punished. A first offence carries a civil penalty of up to £5,000, while fines for repeat illegal rent in advance breaches can be up to £30,000.

Keeping compliant with the entire Renters’ Rights Act 2025 is essential as local authorities can issue civil penalties for breaches. Fines for offences under section 249A of the Housing Act 2004 and section 23 of the Housing and Planning Act 2016 increased from £30,000 to £40,000 on 1st May 2026.

Rent in Advance: The New Rules Explained

The Renters’ Rights Act 2025 is clear: any terms in a new tenancy agreement requiring the tenant to pay rent in advance will not be valid. This means landlords can’t “ask for, encourage or accept” rent before a tenancy agreement has been signed by their tenant, themselves and/or their letting agent. Doing so is now classed as a breach of the Tenant Fees Act 2019.

This new rule only applies to new tenancies created on or after 1st May 2026. Any existing tenancy agreement with a quarterly or six-monthly rent clause already in place is unaffected.

As a reminder, the Tenant Fees Act 2019 also stipulates landlords (or their letting agent) can’t force tenants to pay for services offered by a third party, such as a specific referencing agency, inventory clerk or professional cleaner.

How Much Rent in Advance Can Landlords Request?

The Renters’ Rights Act 2025 does permit the landlord to request a rent payment during the pre-tenancy period – the time between signing the tenancy agreement and the tenancy starting – but the amount has changed.

A tenant paying their rent monthly can be asked to pay one month’s rent during the pre-tenancy period. If the tenant pays their rent more frequently, the landlord can request up to the first 28 days’ rent during the pre-tenancy period.

How to request rent in advance and deposit sums

1. Tenant pays a holding deposit (capped at one week’s rent)
2. Referencing is completed
3. Tenancy agreement is signed by the landlord and tenant (as well as the letting agent, if involved)
4. Tenancy deposit is paid and protected within 30 days of receipt
5. Landlord requests the initial rent in advance, within the permitted pre-tenancy period
6. Tenant moves in on the agreed start date

What About Holding Deposits?

The amount allowed for a holding deposit remains unchanged – capped at one week’s rent under the Tenant Fees Act 2019. This amount must be put towards the tenant’s first rent payment or returned to them once the tenancy proceeds.

Can Tenants Choose to Pay Rent in Advance Voluntarily?

The Renters’ Rights Act 2025 does have an interesting caveat. A tenant can voluntarily offer to pay rent in advance once the tenancy has started, not before or during the pre-tenancy period. This can help a tenant budget. There must, however, be zero invitation or encouragement from the landlord to do so.

Additionally, a landlord should clearly allocate any rent in advance to specific rent periods, or risk the payment being reclassified as a tenancy deposit (and therefore subject to the 5/6-week cap).

What This Means for Landlords Renting Out Property in East London

Rent in advance and deposit protection rules changed in 2026. As such, East London landlords need to be meticulous when creating assured periodic tenancies, requesting money, protecting a tenant’s deposit and tracking dates. A wording and policy audit is essential if you’re creating an assured tenancy after 1st May 2026. You might find our landlord responsibilities guide useful.

Landlords in East London continue to enjoy a positive lettings landscape but they need to pay attention to rule changes. The consequences for non-compliances – more costly fines and possession refusals – can’t be ignored. If you have a buy-to-let in the East Ham or Manor Park areas and are worried about letting within the law, contact Lint Group for support or take a look at our Help For Landlords service page.