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Plans to cap tenancy deposits will have major implications for tenants

The government’s proposals to cap tenancy deposits at no more than one month’s rent, as announced in the Queen’s Speech, will create major issues for tenants, warns Andrew Sanderson of AKS Residential.

The Draft Tenants’ Fees Bill, which is set to be implemented in spring 2018, will bring forward proposals to ban landlords and agents from asking tenants to make any payments as a condition of their tenancy with the exception of the rent, a capped refundable security deposit, a capped refundable holding deposit and tenant default fees.

It also introduces a cap on holding deposits at no more than one week’s rent and the security deposits that tenants leave with landlords, or their letting agents will be capped at a maximum of one month’s rent.


The Bill was introduced with the aim of tackling unfair fees on tenants to make the private rental market more affordable and competitive, but Sanderson is concerned about the impact this will have on many tenants.

He said: “This Bill is going to have major implications for tenants, particularly those with anything less than perfect references or those who have pets.

“At the moment, someone who may be viewed as a higher risk can mitigate this by paying a higher deposit so that the landlord is still happy to accept them as a tenant. If people in this circumstance can no longer pay a higher deposit, then there is a lot less chance that a landlord would want to accept them.”

The proposed changes will also impact on people who wish to rent with pets, as Sanderson explained: “Tenants who have got pets always pay a slightly higher deposit to protect the landlord against the extra risk of damage to their property caused by their pet.

“Even as it is, the majority of landlords don’t accept pets, so if you can’t collect a higher deposit then there will be even less landlords who would allow pets.”


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  • Bill Wood

    I take a deposit of typically £1600, equivalent to 2 months rent or thereabouts. Not only does this discourage tenants not paying the rent on their last month of occupation, it also indicates to me that they have sufficient funds to undertake the tenancy comfortably. If a tenant begins a tenancy 'on a shoestring', the chances are they will become unstuck financially in a short time.


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