Moving properties is never fun - but having a debt or another black mark on your credit report can make the experience even more stressful.
Beth Ashley, a freelance journalist, was gobsmacked when she was asked to pay 12 months’ rent upfront - totalling £14,400 - because she has a county court judgement (CCJ) on her credit file.
Despite paying the debt owed in 2018, a CCJ remains on your credit report for six years - making it harder to borrow during that period.
When you try to rent a property - particularly if you’re going through an estate agent, as opposed to a private landlord - it is likely you’ll need to pass credit checks and referencing first.
It’s at this point when any bad marks could be flagged - and if an estate agent or landlord spots something they don’t like, there is no law that stops them demanding months’ worth of rent upfront.
Speaking to The Mirror, Beth, 24, who lives in Hampshire but is looking to move to Surrey, said: “I was furious as I couldn’t afford that.
“The house I was enquiring about was £1,200 per month. If I had over £14,000 sitting in my account, wouldn't I be enquiring about buying rather than renting?
“I said this to the estate agent as politely as possible, and he actually agreed it was a ridiculous thing to ask, but that it’s the policy.
“I asked if the landlord would consider a guarantor instead. They said they would as long the CCJ was for £1,000 or less - and the guarantor earns at least £43,000."
A guarantor is someone who agrees to pay your rent if you don't pay it - which can be a big ask for a parent or close relative.
They'll also be subject to credit checks, meaning they could be turned down for this role if they too have any marks of their file.
Ultimately, Beth decided not to go ahead with the move and is still on the hunt for a new home with her partner.
She said: “We have someone ready to be a guarantor if we need it. But we're very fortunate - this isn't the case for everyone.
“I hate to think think people who are estranged from family would do in this situation."
Renters' rights - can you be asked to pay upfront?
As we've mentioned above, there is no law that stops landlords or estate agents asking for several months' rent upfront if they feel someone could be a financial risk.
This means if you've got a history of debt, or perhaps aren't in a stable job right now, you could be at risk of being asked to stump up the funds in advance.
Jeremy Robinson, group managing director at Housing Hand, says this can typically happen if a tenant fails a credit check or is unable to provide a qualifying UK guarantor.
Ultimately, a landlord still has the power to show discretion and still rent out the property to that person even if they don't like their credit history - so in other words, it is down to them to decide what to do.
Mr Robinson notes how more landlords are requesting more months' rent upfront right now due to toughening up their referencing checks following the coronavirus crisis.
He said: "On average, landlords usually require six months' rent in advance.
"But during the Covid-19 pandemic, we’ve seen them tightening up their referencing criteria and many more requiring 12 months’ rent upfront."
Despite being allowed to ask for rent upfront, landlords and estate agents are still not allowed to introduce any hidden fees.
In other words, the money you pay upfront must be for the rent only - it also can't be treated as a deposit.
Nick Armitage, head of litigation at Ramsdens Solicitors, said: "It is against the law for a landlord or letting agency on behalf of the landlord to disguise extra fees in the advanced rent.
"Any payment of the tenancy rent upfront must be for the rent."
A spokesperson for the National Residential Landlords Association said landlords should treat tenants on a case-by-case basis to understand their unique situation.
They added: "Broadly speaking, where landlords seek rent payments upfront it will be in response to situations in which it is difficult for the tenant to satisfy the usual income or referencing requirements.
"This can especially be the case where a tenant might have an income which fluctuates considerably.
"In such situations we would encourage landlords to look for alternatives to asking for high levels of rent upfront.
"Where necessary, it is usually simpler to obtain a guarantor or suitable insurance product to provide assurance to tenants and landlords that the rent will be covered."
It is also discriminatory for landlords or letting agents to refuse to rent a property to someone because they claim benefits, following a landmark ruling in 2020.
The "momentous" court ruling found a single mother-of-two had experienced indirect discrimination when a letting agent refused to rent to her.
