Hello. Have some new potential tenants who failed referencing. They have offered 12 months rent in advance against a 12 month AST.
They’re retired, and all income for the next 5 years (until they get to claim pensions) will be used from a savings pot, to which they have and can prove at £200k.
They would like to do this every time the AST renews, so after 12 months, they’d like to resign a further 12 month AST and then make another 12 months advanced rental.
Is this possible (legal/compliant) ?
They can’t pass referencing as fail in affordability, even with proof of £250k of savings to use, hence their offer to always pay upfront.
It is okay to accept rent in advance at the moment. When the new Renters Rights Bill comes into force in early 2025 it will prohibit any landlord from requesting rent in advance although there has been some debate about the possibility of a landlord accepting rent in advance for those tenants who wish to pay in advance. In particular students that get their maintenance grants for each term of the academic year will often want to pay for the whole term to help them manage their finances. The government have yet to clarify this point although I anticipate that rent in advance will be allowed if the tenant requests it rather than the landlord demanding it.
AST will be ruled out next year. All tenancies will be periodic.
Eviction will be a while different ball game
The government are introducing taxes. Does that impact their pension pot?