Landlord bashing…is the deposit sufficient?

Landlord bashing…is the deposit sufficient?

0:02 AM, 18th May 2023, About A year ago 9

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Hello, with all the ‘multi-agency landlord bashing’ that seems to be going on at the moment, I’ve been giving some thought about the stage when existing tenancies end and new tenancies begin. My concerns revolve around deposits when a new tenancy begins.

Generally, a new tenant will pay a ‘deposit’ of one month’s rent + one month’s rent in advance. My perception of this arrangement is that it’s rapidly heading to being totally inadequate. Given the average value of a typical house in England is £300k+, how can a combined deposit and one month, totalling around 0.75% (at 1100pcm) be considered adequate?

I’d be interested to learn other Property118 reader’s thoughts on this as I expect things are only going to head further downhill. Are readers implementing higher financial expectations in terms of deposits? Has this impacted the number of tenants arranging viewings due to affordability? What about the vetting of prospective tenants? If you have increased, has this raised prospective tenants’ expectations? Have readers adopted any other, stricter requirements?

A lot of questions here to address but surely, I’m not the only landlord that is thinking about these things a lot more than I ever did previously.

For context, the driver behind these questions is a recent tenant (who we personally knew) that managed to leave a dreadful mess of damage behind them. The property was in mint condition beforehand and despite a no-pets policy, they brought in a large dog that had a voracious appetite for doors, kitchen cabinets, bath panels, carpet etc. Retention of the deposit was our only recourse which didn’t come close to restoration.

As an aside, it may also interest readers of the rental market in Italy where my sister-in-law lives. Properties there are commonly provided in what I would describe as ‘bear wall’ condition. That is, no kitchen cabinets, no bathroom appliances, no internal doors, and no floor coverings – unless the previous tenants leave in a hurry and abandon some of the above. Of course, the ‘fabric’ of the property could get damaged but anything over that would be self-defeating for the tenants.

Question is, could this Italian model be adopted here in the UK?



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7:47 AM, 18th May 2023, About A year ago

I have never taken a deposit as all of my tenants were long term and I do a complete refresh of the property after they have left. -- did take a tenant to court once and she complained I had not refunded her deposit, didn't go well for her when I produced the signed piece of paper saying she hadn't paid one.

Seething Landlord

8:00 AM, 18th May 2023, About A year ago

Have I misunderstood your question or are you unaware of the Tenant Fees Act 2019, which limits the deposit to five weeks rent?

Simon M

9:02 AM, 18th May 2023, About A year ago

The Tenant Fees Act limits the deposit to a maximum 5 weeks
The bare walls idea won't be acceptable under the new standards which will require standards for doors, bathrooms, kitchen similar to social housing.
The obvious choices are to charge a higher rent and hope the tenant stays long enough to cover the damage, or sell up - which Gove seems to intend but would never say.


12:05 PM, 19th May 2023, About A year ago

It may be prudent to reasses your deposit policy, as under the Tenant Fees Act 2019 its is illegal for a landlord to demand/hold more than 1 month + 1 weeks rent for a deposit.
The wisest course of action would be to carry out regular inspections of the property, many do this annually, some carry them out every six month, I wouldnt recommend more frequent inspections (unless it's a HMO situation) as it could be in contradiction to your tenants "right to peaceful enjoyment" of the property.

David Houghton

15:04 PM, 19th May 2023, About A year ago

The reality is the government want property letting to be the realm of institutional Investors only. You can't take a higher deposit that's banned, you can restrict it to people you can use .I e. working UK nationals only but can't instruct an agent to screen out other tenants. So either way it's difficult and worthwhile looking for alternative investment short let's maybe?


16:22 PM, 19th May 2023, About A year ago

Reply to the comment left by David Houghton at 19/05/2023 - 15:04
Everyone talks about these institutional investors sucking up the properties that landlords sell, who are they ? .. They would need to provide 2million+ homes to rent and They wouldnt be buying ex-lanlord properties they would if they had any sense be building new purpose built homes at EPC B/A rating , and they certainly wouldn't be catering for the social tenants on LHA rents in any great numbers.

James Denning

10:17 AM, 20th May 2023, About A year ago

I think a regulated insurance based approach is the way ahead, where both tenant and landlord build up a history that helps determine the level of premium, and possibly where serious cases of damage caused by a tenant can lead to further action by the insurer who has the clout and resources to pursue the tenant or at least ensure their ability to rent (or get a mortgage) are affected somehow. Conversely landlords who don't play fair also find it difficult to get insurance. Deposits are reduced and premiums possibly part of the rent. Of course this needs even more regulatory change And careful thought but the current proposals fall short of reform that actually benefits good landlords and good tenants who both suffer from the bad players.

Mary Afolabi

17:07 PM, 22nd May 2023, About A year ago

5 weeks does not cover anything if they have left the house in a state. Let's say the cost of repair is £3000 and the tenant deposit is £1000, you are at a loss of £2000. This does not cover any rent arrears.or court case either. I think all tenants, whether working or lot, should pay for all the damages. Apart from deposits, tenants should also have guarantors that would pay if the damages exceeds the deposit.


17:18 PM, 22nd May 2023, About A year ago

Reply to the comment left by Mary Afolabi at 22/05/2023 - 17:07
I agree with you, but in reality you are living with the fairys if you think you would get your money back

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