Letting agents withholding rent paid in advance?

How do they know there's a mortgage on the property?
That's not public information is it?

Even if its their standard practice, it ignores your standard practice AND is it written into the contract with the agent?

Hi Steve
Yes, this is normal practise. It is generally because in the worst case scenario, if a property is repossessed during the paid upfront period, the tenant hasn't lost their rent.
During the 2008 market crash, this happened a few times unfortunately.
Sharon

So how does the lettings agents know if there is a mortgage on the property ?
The words Bull and manure come to mind !
Are they making this up as they go along.
How you pay your mortgage or landlord insurance or anything else running your business is your affair.
What you need to Rent a property is too comply with the Law and rules/regs in your local area.
IE EPC, EICR, GSC, Fire Safety Certificate ( maybe just HMO,s ) PAT testing, Legionella checks, Deposit laws, etc
Nothing in there about the Lettings Agents holding onto 5 months rent.
Contact Propermark direct and ask them !

Pretty standard practice. This is done in the event that something happens in the tenancy and the tenant leaves early. The agent is " piggy in the middle" where tenant would be asking for proportion of rent back and landlord has it and won't return it. Same if LL falls into arrears and house is repossessed and tenant has to move out.

Also remember it can also prevent you getting taxed on the lump sum in one tax year instead of spread over two tax years. If you are close to 40% threshold then it may put you well into it.

Make sure money is protected in agents client money account, and the tenants not using property as a cannabis farm or has poor credit. Both " red flags" for 6 months up front rent.

If the agents are holding your money then they should pay you interest on it. 5 months rent is not insubstantial and now that interest rates have risen this seems like a good wheeze for agents to earn interest on money that is not theirs.
Make sure it is in a designated clients' account with your name on it. It must have the word client in the account name so that if the agent goes bust it is ring fenced and cannot be touched by their creditors. Interest should be paid into the designated account and not to the agent so that you receive the benefit.
If there is nothing in your agreement with them about them retaining the money then I would demand it be paid to you.

@TheBiggerPicture it is easy to discover if there is a mortgage, A simple Land Registry search will uncover the name of the lender and the date of the mortgage

@Fed Up Landlord "Also remember it can also prevent you getting taxed on the lump sum in one tax year instead of spread over two tax years. If you are close to 40% threshold then it may put you well into it."
This may not be correct. The tenancy says the rent is payable in advance on X date. The agent receives the money as the landlord's agent, I think you may find that this is treated as received in the tax year in which X date falls.

I'm perplexed....why would they be paying 6 months rent in advance if they've passed all checks? My one experience of this is two Doctors from Spain never lived in UK so couldn't be credit checked. Paid 12 months in advance and verified by employer (NHS) that they were legit and had contractual employment. Upfront rent was paid direct and not withheld by letting agent. Mortgage and tax implications are for you to manage not letting agent.

No idea about PropertyMark, but I am wondering has the tenancy agreement has been written.
Does the agreement specifically require payment on a six monthly basis? If not then there's a danger of an illegal deposit having been taken. Wording here is very important.
Assuming the tenancy agreement is correctly drafted, the money is yours so I'd request it be handed over.
As for mortgages, it's easy enough to find out if there is one. I have heard of agents doing this before; it's not something we do here, though.

The agents should give you all of that rent minus their cut, its not their money AND tthey could go broke.

well.. judging from the comments above the agent could go bust and the landlord could obtain the rent in advance and then have their property repossessed.
The rent belongs to the tenant until the rent is due. The agent is the middle person acting on behalf of both.
Good agents and good landlords are out there!!
Best scenario would be to not agree to rent in advance and for the landlord to take out a rental warranty for complete piece of mind.
All agents must belong to The Property Ombudsman and renewed every year. They must also have a certificate From Clients Money Protect to prove they have a clients account and is reconciled to the penny when renewing.
landlords should ask for proof of both of these certificates.