The Renters Rights Act 2025, which came into force on 1 May 2026, keeps the existing deposit protection framework largely intact but adds new restrictions on rent in advance and strengthens enforcement for non-compliance. Landlords must still protect deposits within 30 days, observe the five-week cap, and serve prescribed information. The biggest practical change is the new limit on upfront payments: you can no longer ask for more than one month's rent in advance.
This guide covers every deposit and upfront payment rule that applies to private landlords in England from May 2026 onwards, including penalties, possession implications, and the steps you need to take to stay compliant.
What Are the Deposit Rules Under the Renters Rights Act?
The deposit rules under the Renters Rights Act are substantially the same as those that applied under the Housing Act 2004 and the Tenant Fees Act 2019. The Act did not overhaul deposit protection. It reinforced it by tying deposit compliance directly to a landlord's ability to obtain possession orders.
Here is a summary of the rules as they stand from 1 May 2026:
| Rule | Detail |
|---|---|
| Deposit cap (rent under £50,000/year) | Maximum 5 weeks' rent |
| Deposit cap (rent £50,000+/year) | Maximum 6 weeks' rent |
| Protection deadline | 30 calendar days from receipt |
| Prescribed information deadline | 30 calendar days from receipt |
| Holding deposit cap | 1 week's rent |
| Rent in advance cap (new) | 1 month's rent maximum |
According to EPCGuide's analysis, many landlords assume the Renters Rights Act changed how deposits work. It didn't change the mechanics. It changed what happens when you get them wrong.
How Has Rent in Advance Changed?
The rent in advance restriction is the most significant change to upfront payments under the Renters Rights Act. Per MHCLG guidance (2025), the rules work as follows:
Before the tenancy is signed: Your landlord cannot ask for, encourage, or accept any payment of rent. This includes informal requests, "good faith" transfers, or payments through letting agents.
After both parties have signed: You can request a maximum of one month's rent in advance. This applies to monthly tenancies, which is now the default structure under the Assured Periodic Tenancy (APT) system.
During the tenancy: Any clause in a tenancy agreement requiring rent in advance beyond the current rental period is unenforceable from 1 May 2026.
This matters most for landlords who previously asked for three, six, or twelve months' rent upfront. That practice is now unlawful. According to the Independent Landlord (2026), this particularly affects landlords who used large advance payments to offset the risk of tenants with weaker credit histories or limited UK references.
If you rely on advance rent as a risk management tool, you will need to adjust your approach. Options include requiring a guarantor (which remains lawful) or using rent guarantee insurance.
Do I Still Need to Protect Deposits in a Government Scheme?
Yes. You must protect every deposit in one of three government-authorised tenancy deposit protection (TDP) schemes within 30 calendar days of receiving it:
- Deposit Protection Service (DPS): Custodial (free) or insured
- MyDeposits: Insured scheme
- Tenancy Deposit Scheme (TDS): Custodial or insured
You must also serve the tenant with prescribed information within the same 30-day window. This includes confirmation of where the deposit is held, the amount, the scheme's dispute resolution process, and circumstances under which deductions may be made.
For existing tenancies that converted from Assured Shorthold Tenancies (ASTs) to Assured Periodic Tenancies on 1 May 2026, you do not need to re-register the deposit or re-issue deposit documents. Per the MHCLG Information Sheet (2026), existing deposit protection carries forward automatically.
New tenancies granted on or after 1 May 2026 follow the same 30-day protection rules that have applied since 2007.
What Happens If I Fail to Protect a Deposit?
The consequences of failing to protect a deposit have always been serious. Under the Renters Rights Act, they are arguably more so.
Compensation claims: Tenants can claim compensation of between one and three times the deposit amount through the county court. This is unchanged from the Housing Act 2004 provisions but remains the most common penalty landlords face.
Possession order blocked: Under the old regime, an unprotected deposit prevented you from serving a valid Section 21 notice. Section 21 is now abolished. But the Renters Rights Act goes further: no possession order can be granted (except for serious criminal or anti-social behaviour) unless the deposit has been properly protected and prescribed information has been served. Per the government's guide to the Renters Rights Act (2026), this applies to all Section 8 grounds, not just the no-fault route.
Civil penalties: Local authorities can issue civil penalties of up to £7,000 for first or minor non-compliance, and up to £40,000 for serious or repeat offences. These penalties were extended under the Renters Rights Act and apply alongside any compensation claims by the tenant.
Late protection: If you protected the deposit late (after the 30-day window), you are not automatically blocked from obtaining a possession order. Per MHCLG guidance (2026), landlords will not be prevented from obtaining a possession order solely because the deposit was protected late. However, the tenant may still claim compensation for the period of non-protection.
How Does the Five-Week Deposit Cap Work?
The five-week deposit cap was introduced by the Tenant Fees Act 2019 and remains unchanged under the Renters Rights Act. It works as follows:
Calculating the cap: Multiply your weekly rent by five. Weekly rent is calculated as (monthly rent x 12) / 52. For a property renting at £1,200 per month, the weekly rent is £276.92, giving a maximum deposit of £1,384.62.
Higher rents: If the annual rent is £50,000 or more (monthly rent of approximately £4,167), the cap increases to six weeks' rent.
What counts toward the cap: Only the security deposit counts. The holding deposit (capped at one week's rent) is separate. Rent in advance is also separate, though now capped at one month.
Maximum upfront payment example: For a property at £1,200 per month, the maximum you can collect at the start of a tenancy is:
- Security deposit: £1,384.62 (five weeks)
- Holding deposit: £276.92 (one week, returned or offset against first rent/deposit)
- Rent in advance: £1,200 (one month)
- Total: approximately £2,585 to £2,862
Any amount above these caps is a prohibited payment under the Tenant Fees Act 2019, carrying a fine of up to £5,000 for a first offence and up to £30,000 or criminal prosecution for repeat offences.
What Is the Holding Deposit and Has It Changed?
The holding deposit rules are unchanged. A holding deposit is a payment to reserve a property while references and checks are completed. It is capped at one week's rent.
You must return the holding deposit within 15 days of receiving it, unless:
- The tenant fails a right-to-rent check
- The tenant provides false or misleading information
- The tenant pulls out of the tenancy
- The deadline has been extended by agreement in writing
If none of those conditions apply and you fail to return it within 15 days, the tenant can recover it through the county court.
The holding deposit is not the same as the security deposit and should not be confused with rent in advance. According to EPCGuide's analysis, holding deposit disputes remain one of the most common complaints to deposit protection schemes.
How Do Deposits Interact With EPC Compliance?
Deposit protection and EPC compliance are separate legal requirements, but they interact in practice. Under the Renters Rights Act and MEES regulations, landlords must provide a valid EPC to tenants. From 2028 (new tenancies) and 2030 (all tenancies), that EPC must show a rating of C or above.
If you are planning EPC upgrades to meet the 2030 deadline, you cannot use a tenant's deposit to fund those works. The deposit is held to cover unpaid rent, damage beyond fair wear and tear, and cleaning costs at the end of the tenancy. Energy efficiency improvements are a landlord responsibility.
However, if you are budgeting for both deposit protection fees and EPC upgrade costs, it helps to understand the full picture. Use EPCGuide's cost calculator to estimate your upgrade spend alongside your ongoing compliance obligations.
Landlords who fail to provide a valid EPC face fines of up to £5,000 per property. Combined with deposit non-compliance penalties of up to £40,000, the financial risk of ignoring either obligation is substantial.
What Should Landlords Do Now?
If your tenancy converted to an Assured Periodic Tenancy on 1 May 2026, you should:
- Confirm deposit protection status. Log into your TDP scheme and verify the deposit is showing as active. You do not need to re-register, but it is worth checking.
- Review your tenancy agreement. Remove or amend any clause requiring more than one month's rent in advance. Such clauses are now unenforceable.
- Serve the Information Sheet. The MHCLG Information Sheet must be served to all tenants by 31 May 2026. Failure to serve it carries a fine of up to £7,000.
- Check your EPC. You must have a valid EPC. If yours has expired or you are approaching the 2030 deadline, start planning upgrades now. The grant checker can identify funding you may be eligible for.
- Document everything. Keep records of when the deposit was protected, when prescribed information was served, and when the Information Sheet was provided. Under the new enforcement regime, local authorities can request this evidence at any time.
For a complete overview of all landlord obligations under the Renters Rights Act, see EPCGuide's landlord compliance checklist.
How Does This Affect Section 8 Possession Claims?
Section 21 is gone. All possession claims now go through Section 8, which requires landlords to prove specific grounds. Deposit compliance is now a gateway requirement for almost all grounds.
Per the government's guide to the Renters Rights Act (2026), a court cannot grant a possession order (other than on grounds of serious criminal or anti-social behaviour) if the deposit has not been protected and prescribed information has not been given to the tenant. This is similar to the old restriction on Section 21, but broader in scope.
Ground 1 (landlord needs to move in) and Ground 1A (landlord wants to sell) both require deposit compliance before a possession order can be made. So do rent arrears grounds, anti-social behaviour grounds (other than the most serious), and the new Ground 4A for student HMOs.
If your deposit is not currently protected, fix it immediately. Late protection will not block a possession order outright, but ongoing non-protection will.
Frequently Asked Questions
Can I still ask for a deposit under the Renters Rights Act?
Yes. The right to take a security deposit is unchanged. You can request up to five weeks' rent (or six weeks if the annual rent is £50,000 or more). You must protect it in a government-authorised scheme within 30 calendar days and serve prescribed information within the same period.
Has the deposit cap changed under the new rules?
No. The five-week cap (introduced by the Tenant Fees Act 2019) remains in place. The Renters Rights Act did not alter the cap amount. What changed is the enforcement landscape: civil penalties for non-compliance now reach up to £40,000, and deposit failures block most possession claims.
Can I ask for six months' rent in advance?
No. From 1 May 2026, the maximum rent in advance you can request is one month's rent. This applies to all new and existing private tenancies in England. Requesting more than one month is a prohibited payment under the Renters Rights Act.
What if my tenant offers to pay more rent upfront voluntarily?
The law prohibits landlords from asking for, encouraging, or accepting more than one month's rent in advance. Even a genuinely voluntary offer from the tenant cannot be accepted. The restriction is absolute.
Do I need to re-protect deposits for existing tenancies?
No. If your deposit was already protected in a government-authorised scheme before 1 May 2026, it carries forward automatically when the tenancy converts to an Assured Periodic Tenancy. You do not need to re-register the deposit or re-issue deposit documentation. Per the MHCLG Information Sheet (2026), existing deposit protection continues to apply.
What is the penalty for not protecting a deposit?
Tenants can claim compensation of one to three times the deposit amount through the courts. Local authorities can also issue civil penalties of up to £7,000 for a first offence and up to £40,000 for serious or repeat non-compliance. You will also be unable to obtain most possession orders until the deposit is properly protected.
Does my EPC need to be valid to take a deposit?
The two requirements are separate, but both must be met. You need a valid EPC to let a property and you need to protect any deposit taken. Failure on either front carries its own penalties. See the Boiler Upgrade Scheme guide for one way to reduce your EPC compliance costs.