Landlords will have the amount they can set for a security deposit for a privately rented home in England capped at the value of five weeks’ rent.
The measure is part of the Tenants Fees Bill going through Parliament.
The cap will apply to rents under £50,000 a year – homes attracting rents of more than £50,000 will have a six-week rent cap.
Communities Secretary James Brokenshire explained the change in England was part of his mission to create a fairer housing market for renters moving into a new home.
His department calculates capping security deposits will save a third of renters a total of £64 million a year while still allowing landlords to recoup money to pay for rent arrears or damage to their properties.
“The 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,” said Brokenshire.
“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.
“This is unacceptable. I want to see a housing market that truly works for everyone and one which provides a better deal for renters.”
The cap means throughout a tenancy, landlords can only charge tenants for changing locks or to catch up with rent arrears. Any fee for damage to a property will be dealt with at the end of a tenancy.
The Bill will limit charges for damage by stopping landlords and letting agents charging tenants default fees or excessive amounts for damage that costs just a few pounds to put right.
The Bill is expected to become law in spring or summer 2019.
Does the Government actually want a private rental sector? Without it where are the rentable properties going to come from? Social housing organisations can’t do it on their own. Why does it appear to be a considered strategy to eventually drive us all to give up? The demand is huge now, I would not wish to be a renter in the future with even fewer properties on the market.
I am a long standing law abiding Landlord, and after years of coming across a good number of tenants who just do not care about other peoples property, have been owed thousands of pounds, trashed property and unable to recoup the costs, I think this capping stinks! It is another available option for tenants to do what they like knowing they can get away with it and not have to pay for any repairs.
“Everyone deserves a home to call their own”, what a load of tongue waggle! Clearly not every-one, I can think of 85,000 people who don’t have a home, they just have a terrible room, often shared, well below acceptable standards – we call them UK prisoners! Maybe that don’t deserve one (not making that call here), but they certainly don’t have one!
If you want a ‘home of your own’ you have to buy it, and then you will find it is ‘actually’ owned by a mortgage company. If you stop paying the loan back they will evict you, using an S21 the same process as a renter. Renters already have the same rights as mortgaged home owners, but far lower upfront costs.
In the real world, very few people have a “home that is their own”, and no one deserves it, but you might earn one, if your lucky!
Another nail in the coffin of the PRS!
No problem with deposit cap.
But charging for damage repair only at end of tenancy is not sensible.
On the one hand, the landlord is unreasonably out of pocket for making good damage caused by tenant which, if not repaired, will have serious consequences eg to electric wiring, roof/windows letting in rain.
On the other hand if the only time at which the landlord can recover the cost is at the end of a tenancy, this encourages the landlord to seek an early termination
Let’s see the detail before making this assumption. The article mentions this but actually what it’s saying is that a landlord won’t be able to charge “fees” for repairs but the costs of repair are still acceptable. We can see how this is confusing from the article wording. Once we know the final legislation, we will publish detailed information based on what the actual legislation will say which we just don’t know yet.
This is a concern. We try to be very reasonable with our deposits, but we do ask for a month and a half, and very rarely two months, deposit when tenants have pets. All these reforms seem to forget about being fair to the landlords as well!
My former neoughbours let their house via an agent and moved abroad. The tenant neglected and damaged the property causing over £10,000 of damage which they could not get back. This legislation must also prorect landlords from negligent tenants and I am not sure how that will work.
Does the new deposit cap relate to new tenancies only from 1st June 2019 or will it apply to existing tenancies?
We have now published an article about the tenant fees ban and considered questions asked here: https://www.landlordsguild.com/understanding-the-tenant-fees-act-2019/