Rental bidding and rent in advance: the new limits

The Renters' Rights Act 2025 introduces new rules for rental bidding and restricts the amount of rent landlords can request in advance. Landlords must understand these changes to remain compliant.

7 min read · Updated 27 August 2026

Overview

Under the Renters' Rights Act 2025, landlords and letting agents in England are now prohibited from inviting or accepting bids above the advertised rent for a property. This means that properties must be advertised at a fixed rent, and tenants cannot be encouraged to offer more. Furthermore, the Act explicitly limits the amount of rent that can be requested or accepted in advance to a maximum of one month's rent, in addition to the first month's rent, bringing the total to two months' rent unless a tenant voluntarily requests otherwise after a tenancy agreement has been signed. These measures aim to enhance transparency and fairness in the rental market.

Why it matters

Failure to comply with the new rules on rental bidding and rent in advance can result in significant financial penalties, which are considered 'prohibited payments' under an expanded Tenant Fees Act 2019. Landlords and agents face fines for each breach, and repeated non-compliance could lead to severe enforcement actions. Understanding these limits is crucial for maintaining legal standing, avoiding costly mistakes, and ensuring smooth tenancy arrangements in a regulated environment.

Legal requirements

Landlords and agents must advertise a property at a fixed rent and are prohibited from inviting or accepting offers above that price.
The advertised rent must be the maximum rent expected from prospective tenants.
Any request for an offer above the advertised rent is a prohibited payment.
No more than one month's rent in advance, in addition to the first month's rent, may be requested or accepted prior to or at the start of a tenancy.
Any sum requested beyond the two-month limit is a prohibited payment under the Tenant Fees Act 2019.
A tenant can voluntarily request to pay more than two months' rent in advance, but only after the tenancy agreement has been signed.
All requests for rent in advance must be clearly communicated and recorded.
Penalties for non-compliance are governed by the Tenant Fees Act 2019.
Landlords must ensure their advertising materials and agent instructions reflect these new legal requirements.
The rules primarily apply to England, with devolved administrations having their own regulatory frameworks.

Common mistakes

Advertising a property with 'offers invited' or similar phrasing that encourages competitive bidding above the set price.
Accepting an offer from a prospective tenant that is higher than the originally advertised rent.
Requesting two or more months' rent in advance as a standard requirement during the application process.
Pressuring or implying to a tenant that paying more rent upfront would improve their chances of securing the property.
Failing to update standard operating procedures and training for letting agents regarding these new limits.
Not clearly differentiating between rent in advance and the tenancy deposit.
Assuming the rules apply uniformly across the UK without checking devolved legislation.
Accepting a voluntary offer of more than two months' rent in advance before the tenancy agreement is signed.

Practical guidance

Review all property advertisements to ensure they state a clear, fixed rental price and do not invite higher offers.
Instruct letting agents explicitly that they must not solicit or accept bids above the advertised rent.
Update tenancy application forms and screening processes to reflect the maximum rent in advance limit.
Ensure all pre-tenancy correspondence only requests up to one month's rent in advance, plus the first month's rent.
If a tenant wishes to pay more than two months' rent in advance, ensure this is a genuinely voluntary request made after the tenancy agreement is signed.
Maintain clear records of all rental offers and rent in advance payments, demonstrating compliance.
Educate yourself and any staff on the expanded 'prohibited payments' under the Tenant Fees Act 2019.
Regularly check government guidance and RentDocs.co.uk for updates on these regulations.
For properties outside England, verify specific local regulations regarding rent in advance and bidding practices.
Communicate these changes proactively to your letting agents if you use one.

Understanding the Ban on Rental Bidding

The Renters' Rights Act 2025 introduces a significant change to how landlords and agents can market and let properties in England. The practice of 'rental bidding' where prospective tenants are encouraged or permitted to offer more than the advertised rent, is now prohibited. This means that when you advertise a property, the price stated must be the definitive rental amount. You cannot invite bids or accept offers that exceed this advertised figure. The intention behind this measure is to create a fairer, more transparent rental market, preventing situations where desperate tenants feel compelled to overbid to secure a home. Any attempt to solicit or accept a higher offer than the advertised rent will be treated as a prohibited payment, triggering potential fines under the Tenant Fees Act 2019. It is vital that all advertising materials, whether online or in print, clearly reflect a fixed rent price.

Limits on Rent in Advance Payments

Alongside the ban on rental bidding, the Renters' Rights Act 2025 also tightens the rules on how much rent landlords can request or accept in advance. For tenancies in England, you may now only request or accept a maximum of one month's rent in advance, in addition to the first month's rent. This means that, at the outset of a tenancy, the total amount of rent you can require upfront is capped at two months' rent. Any amount requested or accepted beyond this limit, prior to or at the start of the tenancy, is considered a prohibited payment. This restriction aims to ease the financial burden on new tenants, particularly when coupled with a tenancy deposit. The only exception is if a tenant voluntarily decides to pay more than two months' rent in advance, but this choice must be made freely and only after the tenancy agreement has been formally signed. Landlords should review their onboarding processes to ensure compliance with this cap.

Consequences of Non-Compliance

Breaching the new rules on rental bidding or rent in advance can lead to serious repercussions for landlords and letting agents. These actions are now classified as 'prohibited payments' under the Tenant Fees Act 2019, which the Renters' Rights Act 2025 has expanded. The initial penalty for a first breach can be a fine of up to £5,000. Subsequent breaches within a five-year period can result in a civil penalty of up to £30,000 or even prosecution. Furthermore, local authorities have powers to enforce these regulations, and tenants may apply to the First-tier Tribunal for recovery of any illegally charged rent in advance. Compliance is not just about avoiding fines, it also maintains your professional reputation and ensures you are operating within the law. Familiarise yourself with the enforcement powers of local authorities and the implications of breaching these rules, as detailed in our guide, 'The Renters' Rights Act 2025, landlord guide'.

Advertising and Letting Agent Obligations

If you use a letting agent, it is crucial to ensure they are fully aware of and compliant with these new rules. As the landlord, you ultimately bear responsibility for ensuring your property is let legally. You should explicitly instruct your agents that they must not advertise properties with 'offers invited' or similar phrasing. They must not accept offers above the advertised rent, nor should they request more than two months' rent in advance from prospective tenants. It is advisable to have written agreements with your agents that outline their responsibilities regarding these new prohibitions. Regular communication and verification of their practices are essential. Agents also face direct penalties for non-compliance, so a shared understanding of the legal landscape is mutually beneficial. Always review how your property is being marketed and ensure any communications regarding rent in advance adhere strictly to the new limits.

Rules in Scotland, Wales, and Northern Ireland

The Renters' Rights Act 2025, including the provisions on rental bidding and rent in advance, applies to England only. Landlords with properties in Scotland, Wales, or Northern Ireland must consult the specific legislation in those devolved nations. In Scotland, the Private Housing (Tenancies) (Scotland) Act 2016 governs private residential tenancies, but there are no explicit bans on rental bidding or statutory limits on rent in advance, though fair practice is expected. In Wales, the Renting Homes (Wales) Act 2022 and the Renting Homes (Fees etc.) (Wales) Act 2019 apply, which already restrict certain payments but do not have a direct ban on bidding or a specific cap on rent in advance as seen in the new English legislation. Northern Ireland has its own housing legislation, the Private Tenancies Act (Northern Ireland) 2022, but similarly lacks these specific provisions. Always confirm the rules with the relevant authorities in the specific region.

Frequently asked questions

Can I still accept a higher offer if a tenant voluntarily provides it?

No, not for the rent itself. The Renters' Rights Act 2025 bans inviting or accepting offers above the advertised rent for the property. This applies even if a tenant voluntarily offers more. The only exception for a 'voluntary' payment relates to paying *more than* two months' rent in advance, and this must occur after the tenancy agreement is signed and be genuinely tenant-initiated, not landlord-solicited. The advertised rent is the maximum rent you can charge.

What if a tenant wants to pay six months' rent upfront?

A tenant can voluntarily choose to pay more than two months' rent in advance, for example, six months, but this decision must be made freely by the tenant and crucially, *only after* the tenancy agreement has been signed. You, as the landlord or agent, cannot request or imply that this is a requirement or a preference during the application or pre-signing phase. Up to two months' rent in advance is the maximum permissible request prior to a signed agreement.

Does the rent in advance limit include the tenancy deposit?

No, the limit on rent in advance is separate from the tenancy deposit. The tenancy deposit is capped under the Tenant Fees Act 2019 at five weeks' rent for properties where the annual rent is less than £50,000, or six weeks' rent if the annual rent is £50,000 or more. The rent in advance limit of two months' rent applies solely to the rent payments themselves, not the deposit. Both are distinct financial obligations.

Are 'holding deposits' affected by these changes?

Holding deposits are not directly affected by the new rental bidding or rent in advance rules themselves, but they remain subject to existing Tenant Fees Act 2019 regulations. A holding deposit is capped at no more than one week's rent. It can only be requested to reserve a property while references are checked. The holding deposit must be refunded or put towards the first rent payment or tenancy deposit if the tenancy proceeds.

What records should I keep to prove compliance?

You should keep clear records of all property advertisements, including the date they were published and the advertised rent. Document all offers received, demonstrating that none were accepted above the advertised price. For rent in advance, keep records of your initial requests, which should not exceed two months' rent. If a tenant voluntarily chooses to pay more, document their explicit request made *after* the tenancy agreement was signed. This evidence will be vital if compliance is ever questioned.

Do these rules apply to renewals of existing tenancies?

Yes, the Renters' Rights Act 2025 rules generally apply to all tenancies, including new tenancies and statutory periodic tenancies that arise at the end of a fixed term. When a tenancy renews or becomes periodic, you cannot seek to implement a rent increase through a 'bidding' process. Any rent increase must follow the lawful procedures for rent review, which typically involve serving a Section 13 notice or agreement with the tenant. The rent in advance limits also apply to any new agreements.

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This guide is general information for UK landlords and letting agents, not legal advice. Rules differ across England, Wales, Scotland and Northern Ireland, so check your local requirements or take advice before acting.