The Renters' Rights Act changed the rent cycle. Most agencies still collect rent the old way

On 1 May 2026, the first phase of the Renters' Rights Act came into force in England. Six months on, most of the commentary is still about evictions, periodic tenancies and the new grounds for possession. Much less has been said about something every agency deals with each month, which is how the rent actually turns up.

We keep hearing a version of the same thing from agents. The tenancy agreements have been rewritten, the processes for notices have been rewritten, and the way rent is collected hasn't changed at all.

Rent in advance used to carry some of the risk

For years, rent in advance quietly did a job in the lettings market. An applicant without a guarantor, or with a thin credit file, or newly arrived in the UK, could secure a property by paying several months upfront. Goodlord's 2025 research found that one in five renters had done exactly that.

For new tenancies, that option has gone. Agents in England can't ask for more than one month's rent in advance, and they can't take rent before the agreement is signed.

The risk didn't go anywhere, though. It moved into the monthly collection, and that's a part of the business many agencies haven't looked at in years.

What actually changed for payments

Periodic tenancies have no end date, so there's no natural moment to re-reference a tenant or set up the payment again. Whatever arrangement was put in place at the start may now have to run for a very long time.

Rent increases now go through a Section 13 notice and can only happen once a year. That makes each increase a formal event, and it makes any gap between the new rent and what arrives much more obvious. A standing order the tenant set up three years ago doesn't know a Section 13 notice has been served.

And without months of rent held upfront, there's no buffer. An arrear is a real arrear from the first missed payment, and the agency needs to know about it on the day, not when someone reconciles the account at the end of the month.

Why the usual methods struggle with this

With a standing order, the tenant decides the amount, the date and the reference. After a rent increase, the agency is relying on the tenant to update it. Plenty don't, and the shortfall only shows up later.

Direct Debit lets the agency set the amount, but the money takes days to clear, and the Direct Debit Guarantee allows the tenant to have a payment reversed long afterwards. Rent that has already been passed to the landlord can come back.

Manual transfers are quick, but they arrive with whatever reference the tenant typed in.

Each of these leaves someone in the office doing a manual check. Under a regime with more scrutiny and less margin, those manual checks are where mistakes sit unnoticed.

What we think a sound rent process looks like

The idea is straightforward. Whoever knows the correct amount should set it, and the record of what was asked for and what was paid should build itself.

In practice, the agency sends the tenant a payment request each month with the right rent, the right reference and the agency's verified details. After a rent increase, the new figure is simply what the next request asks for. The tenant approves it in their own banking app, so there are no card details or forms involved. The money arrives over Faster Payments within seconds, and the agency can see straight away which tenancies have paid.

All of that leaves a clean trail: what was requested, when, for how much, and when it was paid. If a landlord, a redress scheme or a council asks questions, the answer is already sitting there.

This is how open banking payments work. None of it is new, but the Act has made the case for it much easier to see.

Phase 2 will add more scrutiny

The second phase of the Act starts from late 2026 and brings in the Private Rented Sector Database and new dispute resolution arrangements. More of what agencies do will be recorded and open to challenge.

When a dispute about rent comes up, being able to show exactly what a tenant was asked to pay and exactly when they paid it is the quickest way to settle it.

Where we come in

We've spent six years building open banking payments for UK businesses. For lettings, that means payment links and recurring payment requests for rent and move-in monies, paid straight into your client account, plus bulk payouts to landlords from the same platform. We're regulated by the FCA, and you'll be talking to the people who built the product.

Changing how you collect rent won't make you compliant with the Renters' Rights Act on its own, and we wouldn't claim it does. But if your tenancy agreements have been rewritten for 2026 and your rent collection still works the way it did ten years ago, it's worth an hour to look at the gap.

If you'd like to talk it through, email sales@fena.co.