Government cuts tenant deposit cap from six weeks to five weeks

[Grampa]

The government has this afternoon confirmed that the amount tenants have to pay up front to secure a home will be cut from six weeks’ rent to five for annual rentals of under £50,000.

A deposit of six weeks’ rent will continue to apply where the annual rent is £50,000 or more.

The move, announced as part of the Tenant Fees Bill, was anticipated by landlord groups yesterday. Both the National Landlords Association and the Residential Landlords Association have spoken out against the cut from six weeks' rent to five.

Communities Secretary Rt Hon James Brokenshire MP says: “Today’s amendments will make renting a home of your own more affordable, fairer and more transparent – enabling tenants to keep more of their cash and stopping unexpected costs.

“Everyone deserves a home to call their own. Yet for some renters, moving to a new house can be difficult due to high upfront costs and letting fees.

“This is unacceptable. I want to see a housing market that truly works for everyone, and one which provides a better deal for renters.”

Other amendments to the Bill include protecting tenants from fees by limiting the type of default fees that can be charged by landlords and property agents.

This change means that during the tenancy landlords and agents will only be able to charge fees to replace lost keys or for late rent. Landlords will still be able to claim back costs for damage through the tenancy deposit at the end of the tenancy.

This afternoon's announcement continues: "However, landlords and agents will not be able to write lots of different default fees into a tenancy contract and tenants cannot be charged hundreds of pounds for a damaged item that actually only costs a few pounds to replace."

https://www.lettingagenttoday.co.uk/breaking-news/2018/12/government-cuts-rent-deposit-cap-from-six-weeks-to-five-weeks

[Richlist]

Sounds perfectly reasonable to me.

I view

1. the taking of rent guarantee insurance,

2. a home owning guarantor

3. being particularly selective and picky of who I let my property to

as being far more of a priority than a deposit. But, doing all 4 is preferable.

Many landlords don't do 1, 2 or 3 and then wonder why the deposit isn't enough.

 

[Grampa]

Its not a problem for me either. We take the equivalent of one months rent plus £175  as a deposit  which comes under 5 weeks rent anyway on 90% of properties.

But for HB tenants with a deposit bond from the council it can remain at 6 weeks because no funds change hands at the start of the the tenancy it is just a promised  of payment  up to the value of 6 weeks rent. Unless of course the council change the rules and reduce the amount to match the ruling which wouldn't surprise me.  

I am waiting to see what is acceptable to charge for late payment of rent as that I can see will start to be enforced to its maximum. Collecting is another matter.

[Melboy]

Not a problem for me either.  I too carry out RL's recommendations especially No's 1,2,3.

[Carryon Regardless]

I'm finding this a bit ambiguous.

As I read this the new 'move' applies to a deposit paid 'up front' to secure a property, a holding deposit. This being an amount to reserve the property pending checks and the signing of the AST, where the deposit for the tenancy would more often then be due.

Or is this in relation to what we generally refer to as 'the deposit' that must be protected? As I wasn't aware of a 6 week rule regarding that I would be surprised.

If I am right this 'move' is pointless as any 'holding deposit' would be converted into 'the deposit' or initial rent at sign up.

[Grampa]

Other question it raises is what about pets? A lot of landlords/agents require a larger deposit if a pet is required so if they cant do this all they will do is add an extra 10-20 quid per month on the rent which will cost the tenant more in the long run.

That and all the rent increases I have planned to mitigate the higher agency fees (to landlords) means a lot of tenants will be worst off financially. The agents that dont will make savings with a reduction in training and service. Either way the tenant pays for it.