This is an open letter we sent to the Rt Hon Angela Rayner MP, written by Foxtons CEO Guy Gittins. In it, Guy addresses the last-minute addition of a ban on upfront payments in the Renters' Rights Bill.
As the largest estate agent in the UK,1 we handle an incredible amount of tenancies, which gives us a comprehensive, professional perspective on this issue. By sharing our perspective, we aim to explain what this ban could mean for tenants and landlords, and ask the critical question: how can those who narrowly miss affordability criteria overcome the barriers to housing these changes will create?
1Source: TwentyCI data, 2024 new lettings instructions at an estate agent brand level
28 January, 2025
Rt Hon Angela Rayner MP
Deputy Prime Minister &
Secretary of State for Housing, Communities
and Local Government
Cc: Baroness Taylor of Stevenage OBE
Dear Deputy Prime Minister,
I am writing this letter to you in my capacity as Chief Executive Officer of Foxtons Group plc, London's largest lettings agent, to express concern over the late changes tabled during the Renters' Rights Bill's second reading, specifically regarding the banning of upfront rental payments and the lack of a sufficient transition period.
We want to make it clear that we are wholly supportive of your government's efforts, and indeed previous government efforts, to improve living conditions across the entire sector and to ensure the rental market works for everyone.
But while we support the overarching goals of the proposed legislation, we believe that these amendments will unintentionally harm lower-income tenants, the international student market, hinder upward mobility, and drive talented individuals away from London and the UK.
The problem and the unintended consequences
Landlords typically ask for rent in advance from tenants who struggle to pass traditional affordability checks, such as those with low or unpredictable income, the self-employed, pensioners and foreign tenants who cannot provide a guarantor. Our data highlights the scale of this issue: 10-15% of tenants narrowly fail affordability criteria.
The impact of removing upfront payments would therefore be most pronounced for lower-income tenants, many of whom currently rely on savings or guarantors to secure housing. These individuals would be left with no viable alternatives, effectively excluding them from the rental market and exacerbating the very issues the reforms seek to solve.
Hindering upward mobility
Restricting access to housing in this way also risks undermining social mobility and deterring people from relocating to cities like London - particularly students and entry-level professionals. This could result in a 'talent drain', leaving London and other major cities struggling to attract and retain the diverse, skilled workforce needed to drive innovation and growth. At a time when economic growth is critical, such a loss of talent could have long-term consequences on local economies.
The landlord impact
These regulations would also have an impact on landlords. Upfront payments help mitigate the risk of missed payments from those tenants who can sustain a tenancy but who are unable to pass referencing and affordability checks - without these upfront payments, landlords are understandably less likely to rent to such tenants. It is impractical and irresponsible to deny landlords any assurance when renting to individuals who cannot easily prove their financial capability. This could exacerbate challenges in an already constrained market and may reduce the supply of rental homes, drive up rent prices, and make affordable housing harder to find.
Lack of a sufficient transition period
We are also seriously concerned about the proposed two to three-month transition period, which is entirely inadequate for implementing these changes effectively. Such a short timeframe fails to provide tenants and landlords with sufficient time to adapt, potentially leaving vulnerable tenants without stable accommodation in an already challenging market. The lettings sector is complex and fragmented. Software systems (typically administered by third parties) will need time to re-engineer. The retraining of lettings agents and property managers takes time. We strongly believe that no less than six months' notice should be given between Royal Assent and the commencement date. This will afford landlords and letting agents sufficient time to implement the necessary regulatory changes in an orderly manner, ensuring a consistent and fair approach for tenants seeking rented accommodation.
It doesn't fix the real issue
Foxtons supports the vision of a fair and sustainable rental market that works for everyone. However, these last-minute amendments fail to address the real issue: the chronic undersupply of housing and the resulting supply/demand imbalance. Instead, they risk creating unintended consequences that make the rental market even more challenging for lower-income tenants.
At a minimum, it is essential for the government to address this question: how can those who narrowly miss affordability criteria overcome the barriers to housing these changes will create? Without a clear answer, achieving a fair lettings market for tenants will remain out of reach.
We would welcome the opportunity to meet with you to discuss how we can support the government in creating a balanced and sustainable plan that benefits lower income tenants and reduces the risk of landlords withdrawing from the rental market.
I am copying this letter to the Lords Minister for Housing and Local Government.
Yours sincerely,
Guy Gittins
Chief Executive Officer, Foxtons Group plc
It is the unintended consequences of banning upfront payments which really cannot be overstated. As Guy explained in the letter:
We see 10-15% of tenants use some form of upfront payment to secure a property they'd otherwise not meet the criteria for.
That means...
tenants would not be able to live in the properties they are currently renting.
Source: This letter is written by Foxtons CEO Guy Gittins, a leader of the property industry with over 20 years of experience in the inner workings of London lettings. This open letter, published here in full, provides transparency on the latest rental market legislation. As your trusted property partner, we are working to ensure your concerns are heard in these critical policy discussions.
If you have any questions, please send us an email to ask a Foxtons expert.
