The security deposits that tenants leave with landlords or their letting agents will be capped at no more than six weeks rent instead of four, as previously proposed by the government, it was announced yesterday.
The details were included in the publication of the draft Tenant’s Fees Bill. The cap on security deposits was initially announced last November during the chancellor’s Autumn Statement
“We are very pleased to see that government has listened to our call and increased maximum security deposits from four to six weeks and are encouraged that it appears those tenants who wish to break their contract will have to cover the legitimate costs of finding a new tenant,” said David Cox, chief executive, ARLA Propertymark.
The National Landlords Association (NLA), which has long argued that an arbitrary cap of four weeks’ rent would be damaging to certain groups of prospective tenants, has also welcomed the new proposed cap.
“[The cap] could have the counter-productive effect of making it harder for some households to secure suitable accommodation in the sector,” said Chris Norris, head of policy at the National Landlords Association (NLA).
He added: “Since the plans were announced we have been lobbying the government and we met with the Minister of State for Housing and Planning, Alok Sharma MP, in September in order to press him to rethink his plans for a cap; taking into account the needs of those living and working in the private rented sector.
“The NLA is happy that the government has listened to the evidence we presented on behalf of our members. Whilst we remain disappointed that the government continues to believe a cap is necessary, extending it to six weeks rent will reduce those households and landlords disadvantaged by the policy significantly.”
Ajay Jagota, founder of deposit free renting firm Dlighted is not convinced by government plans to cap tenancy deposits.
He said: “Renting in Britain needs to change, but I’m not convinced this is the change it needs.
“By capping deposits at the industry standard of six weeks rent, all these ‘reforms’ actually do is protect the status quo. So what’s the point of them?
“Deposits will still place a huge financial burden on renters at a time when wages are falling but inflation and debt are rising. This burden makes it harder to find and keep tenants, but ultimately does little to protect landlords against property damage and unpaid rent.”