Purpose-built student accommodation (PBSA) and rent in advance under the Renters’ Rights Act

It is common for landlords, particularly student landlords, to request that tenants pay rent in advance for their tenancy. For example, this could be all the rent upfront before the tenant goes into occupation or payment plans requiring termly instalments.

The Renters’ Rights Act 2025, due to come into force on 1 May 2026, introduces new restrictions on rent in advance. It prohibits landlords from:

1. Taking any rent before the tenancy is entered into. This will be a “prohibited pre-tenancy payment of rent” banned under the Tenant Fees Act 2019 (“TFA”).
2. Taking more than 1 month’s initial rent before the tenancy starts.
3. Requiring the tenant to pay rent in advance once the tenancy has started. This means requesting rent is paid before the period for which it is payable. Any such term in a tenancy agreement will be unenforceable.

As the rental periods of the tenancy cannot be longer than a month, most landlords will only be able to collect rent monthly. Once the tenancy has started, a tenant is free to pay rent in advance and make larger upfront payments voluntarily, but they cannot be required to do so by the landlord.

What do these new rules mean for PBSA?

Eligible PBSA tenancies are due to fall outside the Renters’ Rights Act changes as the Act contains an exemption for private PBSA. I have written more about the exemption here and how the Renters’ Rights Act amends the ‘lettings to student’ exemption at paragraph 8 of Schedule 1 of the Housing Act 1988 by widening the scope of non-educational providers of student accommodation that can grant tenancies that are not assured tenancies.

While the substantive regulations required to implement the exemption have not yet been published, it is expected that where providers are signed up to the “ANUK/Unipol National Code for accommodation owned or managed by non-educational establishments” PBSA tenancies will fall outside the assured tenancy framework and landlords will be able to grant common law agreements.

There is no restriction on asking for rent in advance under a common law tenancy agreement. The new prohibition on requesting rent in advance before the tenancy is entered into (a “prohibited pre-tenancy payment”) does not apply to common law tenancies. While the TFA does apply generally to lettings to students that fall within paragraph 8 of Schedule 1 to the Housing Act 1988, Schedule 1, paragraph 1(1A) of the TFA states that “a payment of rent is a prohibited payment if- (a) it is payable before the tenancy is entered into, and (b) the tenancy is an assured tenancy”. Common law tenancies are therefore not caught by this new restriction as they are not assured tenancies. The existing TFA rules governing other prohibited payments will still apply.

What about existing student contracts converting to assured periodic tenancies?

I have written previously about how existing assured shorthold tenancies will convert to assured periodic tenancies on 1 May 2026 as the PBSA exemption is not expected to be retrospective. (PBSA – Navigating the Renters’ Rights Act transitional period). The law is complex here with the Renters’ Rights Act transitional provisions providing some scope for assured shorthold tenancy status to be preserved for a very limited period if the landlord serves a valid s21 or s8 notice prior to 1 May 2026 and then complies with the requirements in the transitional provisions set out in Schedule 6 of the Act.

However, even where an assured shorthold tenancy converts to an assured periodic tenancy on 1 May 2026, there are special rules that apply to existing tenancies in respect of taking rent in advance. The prohibition on rent in advance after the tenancy is entered into is contained in s8 Renters’ Rights Act. This inserts a new s4B into the Housing Act 1988. There is an express carve out at s4B(2)(a) that states that the prohibition does not apply “to a tenancy entered into before the commencement date” which is the 1 May 2026.

This means that where there is an existing tenancy on 1 May 2026, the landlord can continue to take rent in advance. “Existing tenancy” is defined at s146 of the Renters’ Rights Act as meaning an assured tenancy which is entered into before the commencement date. Therefore, the carve out applies to both tenancies already underway on 1 May 2026, which would apply to 25/26 contracts that started last year, and tenancies entered into before 1 May 2026 including tenancies for the 26/27 academic year where the tenant has not yet commenced occupation. This analysis is supported by the Government’s statutory guidance for local authorities on asking for rent in advance published in November 2025 which states at the beginning:

“These rules will apply to assured periodic tenancies in the private rented sector starting on 1 May 2026.  

The rules will not apply to:  

• tenancy agreements that were signed before 1 May 2026
• payments of rent in advance that were made before 1 May 2026”

Therefore, provided the tenancy was entered into before 1 May 2026 it appears that providers will be able to continue to collect rent in advance for the duration of that tenancy. This will be helpful for 26/27 tenancies already granted that will become assured periodic tenancies from 1 May 2026 and will assist PBSA providers with the transition period.

Providers should be aware that if a tenant has paid rent in advance and then serves a notice to quit the landlord will have to repay rent paid that relates to days falling after the end of the tenancy in accordance with new 14ZC of the Housing Act 1988 inserted by s10 of the Renters’ Rights Act.

My previous blog gives further insights into this topic, read it here.

Conclusion

The Renters’ Rights Act changes are complicated as they affect existing tenancies in different ways to new tenancies granted on or after 1 May 2026. There are additional provisions that apply specifically to PBSA and providers should be taking advice now on how the changes impact their operations.

If you are a PBSA provider and need help navigating the new legal landscape, please contact our expert housing team at mail@anthonygold.co.uk or 020 7940 4060.