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The Government have written to a Conservative and Labour MP to clarify the rules and data regarding Holding deposits and Tenancy deposits post the Tenants Fees Bill.
Junior Housing Minister, Rishi Sunak, has confirmed the new position on taking these deposits in an open letter following questions raised at the first session of the Public Bill Committee.
The Letter states:
On Holding Deposits
I promised to confirm the timescales with regards to holding deposits. The Bill provides that landlords and tenants will usually have 15 days to enter into a tenancy agreement once a holding deposit has been paid. This is the deadline for agreement and during this period, landlords, agents and tenants should take all reasonable steps to enter into a tenancy agreement. Landlords and agents may agree a different deadline for agreement with the tenant in writing.
Landlords and agents must refund the holding deposit in full within 7 days of:
On Tenancy Deposits
I also promised to share the data with the Committee from Scotland, which strongly suggests that capping deposits will not lead to such a cap becoming the default.
In Scotland, the data shows that actual deposit rates are running at around £580 to £730, when the maximum allowed under the cap is, on average, £1286. This compares to a 2 bedroom average rent of £643 per month in Scotland in the year to September 2017, as published in the Private Sector Rent Statistics.
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