Home » News » Security deposits to be capped at five weeks’ rent, government confirms
Regulation & Law

Security deposits to be capped at five weeks’ rent, government confirms

New measure will be introduced as amendment to the Tenant Fees Bill along with tighter rules on what default fees can be charged by letting agents.

Nigel Lewis

Security deposits

The Government has confirmed that it is to cap security deposits at five weeks’ rent for tenancies under £4,166 a month or £50,000 a year.

Default kind of default fees chargeable to tenants will also be limited, now to just the costs of replacing lost keys or recouping late rent.

These amendments are to be made to the Tenant Fees Bill as it passes through the Lords this month, before it becomes law in April next year.

The amendments were leaked to the press on Thursday and, as we reported yesterday, prompted a furious response in a joint statement from the National Landlords Association and Residential Landlords Association. In it they predicted that a cap of five weeks would persuade more landlords to exit the private rental sector.

Housing secretary James Brokenshire (left) says the new measure will affect approximately one in three renters and save tenants £64 million during the first 12 months after the legislation becomes law.

“[These] 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,” says Brokenshire.

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

Tenants paying more than £50,000 a year will still have to pay a security deposit of six weeks’ rent. The Tenant Fees Bill is due to be debated during its Report stage in the Lords next week before going to a final reading and then Royal Assent.

 

December 5, 2018

2 comments

  1. I would not be surprised in a year or so if a 5-week deposit becomes the norm rather than a months deposit which is currently standard for most AST’s. Yet again government good intention will, rather than James Brokenshire thinks, reduce tenants costs by £64 million will probably increase tenant deposits by 25%.

  2. This is yet another outrageous decision by a government totally out of touch with reality. I cannot see any justification in this ruling, providing our tenants ‘do what they are supposed to’ and comply with the tenancy laws then they would have the bond returned in full!! The comments from the housing secretary just don’t make any sense – why does a cap on bond add transparency or make the renting process ‘fairer’. Obviously, the only view that is being considered by the government is that of the Tenant. I wouldn’t blame any Landlord for selling up and leaving the Government to ‘pick up the pieces’! If everyone deserves a home ‘to call their own’, I would suggest to them that they should consider buying their own and approaching the mortgage lenders and paying them the astronomical ‘Admin fee’s’! Or would the government consider stopping mortgage lenders charging buyers Admin fee’s etc also?

What's your opinion?

Please note: This is a site for professional discussion. Comments will carry your full name and company.

This site uses Akismet to reduce spam. Learn how your comment data is processed.