I had hoped to get a one year lease, but we were told that because we don't have any credit record etc in the UK that we would have to pay the final 4 or 5 months in advance, in addition to the first month in advance, the deposit, and the agency fees. After finding a guarantor, and setting a 6 month lease, this was amended to paying the first month in advance, one month's rent as deposit, and an extra month in advance.

It was implied that these large payments were there because we don't have a credit history in the UK (although we have an excellent one in Canada), and because of potential damages from owning a dog, because it's rare to keep a dog while renting in the UK (although it's hard to imagine what kind of damage a 5 lb fixed female yorkie can do to an unfurnished flat with hardwood floors).

What I have found from googling around is this:

1. Any payment that is intended as a security counts as a deposit, and must be put in a deposit scheme, even if it is described as advance rent. If they don't do this, they can be made to pay us up to three times the value of the deposit.

2. A deposit for greater than 2 months counts as a "premium", which means that we can give the tenancy to anyone we want without even talking to the landlord, and that we could perhaps even hold the tenancy for 20 years. I think this last point is ambiguous because landlords don't want "premium" tenancies anymore, and the laws haven't really been applied or kept up to date recently.

This implies to me that if we went for a one year lease, the payment would be large enough to count as a "premium", which is probably not want they want. It also implies to me that on the six month contract, the second "month in advance" needs to be considered as part of the deposit, and put into a deposit protection scheme.

Is this a correct interpretation of the law? Or can they actually charge us large numbers of months in advance provided they phrase it carefully enough?

Here are the sources I used:
http://www.legislation.gov.uk/ukpga/2004/34/part/6/chapter/4
http://www.landlordsguild.com/piggott-v-slaven/
http://nearlylegal.co.uk/2009/02/its-not-a-deposit-honest/
http://www.rla.org.uk/landlord/tenancy_deposits/tds-Alternatives.shtml
http://www.landlordlawblog.co.uk/2010/06/28/why-can’t-tenancy-deposits-be-for-more-than-two-months-rent/
http://www.landlordzone.co.uk/content/tenancy-deposits
http://www.landlordlawblog.co.uk/2012/02/09/five-premium-tenancy-questions-answered/
http://www.legislation.gov.uk/ukpga/1988/50/section/15