Angels Sales & Lettings
What do landlords need to know about the deposit cap?
24 May 2019 3339 Views
The Tenant Fees Act, better known simply as the tenant fees ban, is coming into force from June 1 2019. It will drastically alter the upfront fees landlords and letting agents can charge to tenants, aiming to make the system fairer and more transparent for renters.
As well as a ban on fees, the other major part of the controversial new legislation revolves around a cap on security and holding deposits. But how will this vital part of the rental process change from June 1 onwards?
A cap on security deposits
Under the new rules, security deposits will be capped at five weeks' rent for homes with an annual rental below £50,000, while a deposit of six weeks' rent will apply where the annual rent is £50,000 or more.
According to the government, around one in three renters who currently pay a deposit will benefit from the change – saving tenants approximately £64 million in the first year of the Act.
To begin with, security deposits were set to be capped at six weeks' rent for tenancies under £50,000 a year, but the government amended the Tenant Fees Bill in December to lower the cap after pressure from campaign groups.
A cap on holding deposits
The new Act will also mean that holding deposits (the fee paid by tenants to reserve a property) will be capped at one week's rent.
Once the new rules are in play, landlords will be unable to evict tenants using the section 21 eviction process if they have failed to repay or return an unlawfully retained holding deposit.
For more detailed guidance and information on the Tenant Fees Act 2019, and your rights and responsibilities, the new National Trading Standards Estate and Letting Agency Team (NTSELAT) have provided a very useful PDF document for landlords and agents. Bristol City Council is acting as the lead enforcement authority for the purposes of the Tenant Fees Act.
Helping you to keep on the right side of the law
Here at Angels Sales & Lettings we understand that being a landlord has become a more time-consuming and complicated role in recent years, with the private rented sector growing rapidly and the government introducing a range of new measures to try and keep it in check.
We help you to maintain and get the most from your rental property portfolio by offering a let only and full management service. This includes collection of initial rent and deposit, a full advertising and marketing strategy, intensive referencing, preparation of the tenancy agreement and setting up the tenancy deposit with the Deposit Protection Service, one of the government-approved deposit protection schemes.
To find out more about the services we offer in Enfield and other parts of London, please get in contact with us on: 0800 043 6678.
For an accurate estimate of how much your home could be worth or how much you could be earning in rent, you can also request a free and instant online valuation.
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