Rental Bidding Ban and Advance Rent Limit: New Letting Rules for Landlords in England

The Rental Bidding Ban

Section 56 of the Renters' Rights Act 2025 prohibits rental bidding in England from 1 May 2026. The rules are straightforward:

• You must state a specific rent amount in any written advertisement, listing, or offer
• You cannot invite, encourage, or accept any offer of rent above the advertised rate
• The prohibition applies to both landlords and letting agents

This targets the practice that became widespread in competitive rental markets — advertising a property at one figure, then encouraging prospective tenants to bid higher. Tenants in London and other high-demand areas frequently reported being asked to offer above the asking rent to secure a property.

The ban covers overt bidding (asking for best offers) and indirect tactics (telling a prospective tenant that "another applicant has offered more"). It does not prevent a landlord from setting a high asking rent from the outset — the restriction is on accepting amounts above whatever figure was advertised.

Enforcement and Penalties

The bidding ban is enforced by Trading Standards and local housing authorities.

• First offence: civil penalty of up to £7,000
• Repeat offences: civil penalty of up to £40,000 or criminal prosecution

These are administrative penalties — they do not require a court conviction to be imposed. The local authority issues a notice of intent, and the landlord can appeal to the First-tier Tribunal within 28 days.

The Advance Rent Cap

Separately, the Renters' Rights Act amends Section 4B of the Housing Act 1988 and the Tenant Fees Act 2019 to limit how much rent a landlord can collect upfront.

Before the tenancy agreement is signed: a landlord cannot require, encourage, or accept any rent payment at all.

After the tenancy is executed: the maximum advance rent payment is one month's rent (or 28 days' rent where the tenancy is weekly).

This ends the practice of landlords requesting 6 or 12 months' rent in advance, which was commonly used to offset perceived risk from tenants with limited credit history, overseas tenants, or benefit recipients. Demanding more than one month's rent upfront is classified as a prohibited payment under the Tenant Fees Act 2019, carrying civil penalties of up to £5,000 per breach and a requirement to refund the excess.

What About Tenants Who Offer to Pay More?

A common question: what if the tenant voluntarily offers to pay above the asking rent or offers several months upfront without being asked?

The legislation covers both "requiring" and "accepting" excess payments. Even if the offer is genuinely voluntary and unprompted, accepting it puts you at risk. The tenant or a third party could later report the payment to the local authority, and you would need to demonstrate that you neither encouraged nor accepted a prohibited amount.

The safest approach is to decline any offer above the advertised rent and decline any advance payment beyond one month. Document the conversation if a prospective tenant makes such an offer.

Interaction with Deposits

The advance rent cap operates alongside the existing deposit cap:

• Deposit: maximum 5 weeks' rent (or 6 weeks if annual rent exceeds £50,000), protected in an approved scheme within 30 days
• Advance rent: maximum one month's rent
• Holding deposit: maximum one week's rent (under the Tenant Fees Act 2019)

These caps are cumulative. A landlord cannot work around the advance rent cap by calling the excess a "deposit" or vice versa.

What This Means for Tenant Referencing

Landlords who previously relied on large advance payments as a risk management tool need alternative approaches. The legislation does not prevent thorough referencing — you can still:

• Run credit checks and affordability assessments
• Request employer references
• Ask for previous landlord references
• Calculate affordability including benefits and pensions as valid income (the anti-discrimination provisions require this)

What you cannot do is use a large upfront payment as a substitute for proper referencing.

Our Renters' Rights Act guide for landlords in England covers the full advertising and letting rules, including the anti-discrimination provisions for benefit recipients and families with children.

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