Since 1 May 2026 the maximum a London letting agent can lawfully take from you on the day you sign is one month's rent plus a deposit capped at five weeks' rent. For a flat at the ONS median London one-bedroom rent of £1,495 a month, that is £3,220 and not a penny more. Anything above it, whether it is called a reservation fee, an advance, a premium or a "goodwill payment", is a prohibited payment under the Tenant Fees Act 2019.
The part renters keep getting wrong: the one-month cap did not replace the five-week deposit cap. Both apply, side by side. And offering to pay more than the cap does not make it legal. Section 9 of the Renters' Rights Act 2025 rewrote the anti-avoidance provisions of the Tenant Fees Act so that a landlord or agent cannot accept a prohibited pre-tenancy rent payment even where the tenant volunteers it.
What can lawfully be demanded at signing
The Tenant Fees Act permits six categories of payment and bans everything else. Only three of them apply before you move in.
| Payment | Legal maximum | Notes |
|---|---|---|
| Holding deposit | One week's rent | Refundable, offset against first rent or deposit; 15-day deadline for agreement |
| Tenancy deposit | Five weeks' rent (six weeks if annual rent is £50,000 or more) | Must be protected in an approved scheme |
| First rent payment | One month | Cannot be demanded or accepted before the agreement is signed |
| Reservation or admin fee | £0 | Prohibited payment |
| Referencing, inventory, check-in | £0 | Prohibited payment |
| Rent for months two to twelve, paid upfront | £0 | Cannot be required; a clause demanding it has no legal effect |
The one-week holding deposit calculation trips people up. It is the monthly rent multiplied by 12, divided by 52, and the same method gives you the deposit cap at five or six weeks. Guidance from Ellisons on the deposit cap is clear that you do not round up, and that any excess is itself a prohibited payment. On a £1,800 flat, a week is £415.38 and five weeks is £2,076.92. If the agent's spreadsheet says £2,100, that is £23.08 they are not entitled to.
Two further points on the holding deposit. It buys you a 15-day window (the "deadline for agreement") during which referencing happens, and under the Act the agent must give you clear written information and a draft tenancy agreement before taking it. If the delay is theirs and the deadline passes, Property Redress guidance says the full sum comes back to you within seven days.
The day-one number across London
The ONS Price Index of Private Rents bulletin published on 22 July 2026 puts average UK monthly private rent at £1,388 in June 2026, up 3.3% over twelve months, with England at £1,446. London had the lowest annual rent inflation of any English region in the twelve months to June 2026, at 2.2%. The ONS also records Kensington and Chelsea as the most expensive local authority in the country, at £3,591 in May 2026. For borough-level medians, an analysis of the ONS's Private Rental Market in London statistics for Q1 2026 gives a London median of £1,495 for a one-bedroom flat and £1,800 for a two-bed.
Applying the statutory caps to those ONS figures gives the real cost of a signing day:
- £1,495 a month (ONS London one-bed median): £1,495 rent plus £1,725 deposit = £3,220
- £1,800 a month (ONS London two-bed median): £1,800 plus £2,076.92 = £3,876.92
- £2,100 a month (typical Zone 2 two-bed on the Victoria or Jubilee line): £2,100 plus £2,423.07 = £4,523.07
- £3,591 a month (ONS Kensington and Chelsea average): £3,591 plus £4,143.46 = £7,734.46
The six-week deposit ceiling only bites above £50,000 a year, which is £4,166.67 a month. At £4,500 a month, the deposit rises to £6,230.76 and day one costs £10,730.76. Below that threshold, an agent quoting six weeks is quoting an unlawful figure.
The four workarounds and what to say
Agents adapted to the 2019 fee ban within months. The same thing is happening now. Four patterns are worth recognising.
Guarantor escalation
Requiring a guarantor remains lawful, and nothing in the Act stops a landlord asking for one. What has changed is that a guarantor counts as a "relevant person" for the purposes of the payment rules, so a guarantor cannot lawfully be asked to transfer six months' rent before you sign either. Where the demand shifts is in the income multiple: 30 times the monthly rent, UK homeowner only, sometimes two guarantors.
Ask the agent to put the guarantor criteria in writing and confirm whether a rent guarantee insurance product is acceptable instead. If they insist you buy a specific deposit replacement or guarantor product, that is a problem: Property Redress guidance is that requiring a tenant to use a deposit replacement product without giving them a genuine choice makes the upfront charge a prohibited payment.
The 'voluntary' advance
The most common line you will hear is that you are welcome to offer three or six months upfront to strengthen your application. This is precisely what section 9 of the Act blocks. The amended anti-avoidance wording stops landlords and agents accepting a prohibited pre-tenancy rent payment, and separately stops them inviting or encouraging one or accepting an offer of one. Both halves are enforced by councils.
There is one narrow lawful version. Once the tenancy is signed and you have moved in, you can pay ahead voluntarily, but the money must be clearly allocated to identified rent periods. If it is not, it risks being characterised as money held as security, which drags it inside the five-week deposit cap and the protection rules.
What to say, verbatim, if it is suggested: "I'll pay one month's rent and the capped deposit on signing. I understand an agent can't invite or accept a pre-tenancy rent payment above that under the Tenant Fees Act as amended, so I'd rather not put either of us in that position." That sentence usually ends the conversation.
Oversized deposits and pet money
The other route around a one-month cap is to inflate the refundable side. A pet deposit on top of a five-week deposit is a prohibited fee, as is any additional deposit taking the total above the cap. A landlord can lawfully charge a higher rent for permitting a pet instead, so read the pet clause carefully and check what the headline rent would have been without it. Our guide to what to look for in a tenancy agreement covers the clauses that matter most on a first read.
Also check the default fee wording. Late rent charges are only lawful once rent is more than 14 days overdue, and only at up to 3% above the Bank of England base rate on the outstanding sum. A flat "£50 late payment administration charge" is not lawful.
Third-party payers
The neatest-looking workaround is for the money to arrive from somewhere else: a parent's account, a relocation agent, an employer, a bespoke "advance rent" platform. The Act closes this directly. Landlords and agents cannot use a third party to get round the rules, cannot accept a prohibited pre-tenancy rent payment from a third party, and cannot invite or encourage a relevant person to route the payment that way. "Ask your parents to send three months now" is the textbook breach.
What section 5 anti-avoidance actually does
Section 9 of the Renters' Rights Act inserts a new section 5A into the Tenant Fees Act, headed "pre-tenancy payments of rent: prohibitions", and extends the existing enforcement machinery to cover it. District councils enforce it under section 7, financial penalties follow under section 8, and section 10 lets an enforcement authority recover the money paid. The wording deliberately mirrors the ban on rental bidding, which is why the two are being enforced together.
The bidding ban matters here too. The advertised rent is now a ceiling, not an opening offer. An agent cannot accept more than the price the property was marketed at, so the old trick of offering £150 a month over asking to beat other applicants no longer works either.
If a clause in your agreement requires rent before the period it relates to, it has no legal effect. You do not need to negotiate it out to be protected, though you should still ask for it to be removed so nobody tries to enforce it later.
Reporting a breach
Take it to the private sector housing or trading standards team at the borough council where the property sits. Councils in England have had enhanced investigatory powers since 27 December 2025, and from 1 May 2026 their enforcement duty became mandatory rather than discretionary, with penalties issued directly and no court hearing required.
The numbers are serious. Under the Act's two-tier structure, a breach carries a civil penalty of up to £7,000 and an offence up to £40,000, with criminal prosecution and an unlimited fine available for the worst cases. Councils keep the penalty income, which is the government's deliberate mechanism for making enforcement pay for itself. Statutory guidance, Civil Penalties Under the Renters' Rights Act 2025 and Other Housing Legislation, sets starting points that councils work from.
Practically: keep the WhatsApp messages, the portal listing screenshot showing the advertised rent, and the payment request email. A demand in writing is worth far more to an enforcement officer than a recollection of a phone call. Letting agents must also belong to a redress scheme, and the compulsory PRS Ombudsman for landlords begins rolling out from late 2026.
Tenancies that started before 1 May 2026
Old agreements are not retrofitted. NRLA guidance is that where a tenancy was agreed before 1 May 2026 and includes an arrangement for rent to be collected in advance of a rental period, that arrangement can continue until the tenancy comes to an end. If you paid six months upfront in March 2026, you are not owed a refund.
What did change automatically on 1 May is the tenancy type: existing assured shorthold tenancies converted to periodic assured tenancies, with no fixed term and no Section 21. The transitional window closed on 31 July 2026, the deadline for starting court proceedings on a Section 21 notice served before 1 May. Any renewal or new agreement you sign now falls squarely under the new payment rules.
One knock-on worth planning for. With upfront rent gone as a risk lever, more landlords will use annual rent increases instead, served by notice. If yours arrives and looks steep against local ONS data, the tribunal route is open and free to use: see our guide to challenging a London rent increase.