The cost of the tenant fees ban for landlords has been revealed by deposit protection firm Tenancy Deposit Scheme (TDS), which says it has handed back £817,000 in rental deposits so far to tenants since the ban came in June 1st.
This means it is on track to return nearly £2 million during the first year of the ban’s operation.
The cash is being returned because tenants renewing their contract who paid rental deposits greater than the five-week rental cap now in place must be given the excess cash back. For tenancies over £50,000 a year it’s six weeks’ rent.
TDS says the average amount of money returned to a tenant is £320.27p, and that it has the data because the scheme is the only one to have an online deposit cap refund tool.
Debbie Davies, Assistant Director of Business Development at TDS, says: “We reviewed data from when the legislation was first introduced in order to establish how frequently deposits are being partially repaid by agents or landlords.
“During this period, we have made 2,550 repayments totalling £817,031.33 [and] the highest repayment to a tenant was £3,384.62.
“We believe the deposit cap is having the effect intended by Parliament, with the deposit held being reduced upon renewal, which is great news for renters.”
TDS has also released its latest rental deposit deduction data, which shows that 43% of tenants agree to some form of deduction from their deposit, and that rent arrears and property cleaning are the most common reasons.
Read more about TDS.