Rental deposits to be capped at one month’s rent

by Property 118

9:42 AM, 22nd June 2017
About 2 years ago

Rental deposits to be capped at one month’s rent

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Rental deposits to be capped at one month’s rent

Responding to the announcement in the Queen’s Speech to cap tenancy deposits to no more than one month’s rent, Richard Lambert, CEO at the National Landlords Association (NLA) said:

“The decision to cap tenancy deposits at no more than one month’s rent smacks of a political gesture from a government desperate to court the voters who supported their opponents at the last general election.

“We estimate that around 40% of deposits exceed one month’s rent. Whilst capping them may reduce the move-in costs for some, it will increase the temptation for others to view the deposit as the last month’s rent, leaving landlords out of pocket at the end of the tenancy if, for example, the property has been damaged.

“Some landlords use a higher deposit to give them the extra confidence they need when letting to higher risk tenants, so this could also have the unintended consequence of deterring them from offering their property to those likely to be struggling with affordability in the first place”.



Comments

Mike D

11:29 AM, 23rd June 2017
About 2 years ago

i have stopped renting to benefits tenants & tenants with pets in order to reduce risks of damage to the properties. The risks are great enough financially without adding these 2 additional problems to my list.

Trevor Cooper

11:33 AM, 23rd June 2017
About 2 years ago

Reply to the comment left by "Ian Cognito" at "23/06/2017 - 11:24":

I was just thinking about this point. I will now charge a slightly higher rent for tenants with pets (or not accept them if we cant agree the rent)

I also used to take a two months deposit from tenants with a less than perfect record. They have been grateful for the opportunity to rent when others have turned them down. I guess I will not be able to help these tenants anymore...

Mike D

11:58 AM, 23rd June 2017
About 2 years ago

I have done 6 months in advance for the odd tenant, so i guess 1 month deposit, then 2 month rent so you always 1 month in advance

Phil Ireland

12:16 PM, 23rd June 2017
About 2 years ago

Reply to the comment left by "Ian Cognito" at "23/06/2017 - 11:24":

Agreed, so no more tenants with pets! Spread the pain back onto the tenant.

Dr Rosalind Beck

12:57 PM, 23rd June 2017
About 2 years ago

I think a catch-all solution is to try to always have guarantors - even where we wouldn't have in the past - so tenants without relatively wealthier family members will find it even more difficult to find a house to rent. I, personally, for example, could never get a guarantor.

Then, the next thing they'll do is make it illegal to insist that a guarantor owns their own home or works full-time - that will also be deemed to be disablist, I assume (shouldn't give them ideas, I know)

What the idiots on high fail to grasp is that we are business people used to thinking our way around problems and the more problems they heap on us, the more we will solve and in the process the tenants will get screwed.

Heather G.

13:34 PM, 23rd June 2017
About 2 years ago

Reply to the comment left by "Ian Cognito" at "23/06/2017 - 10:54":

My mortgage T&Cs state I cannot rent to anyone receiving benefits so I must include this in my criteria when advertising/dealing with agents & prospective tenants. If I get done for discrimination, can I counter-sue Santander?

Heather G.

13:35 PM, 23rd June 2017
About 2 years ago

Reply to the comment left by "Phil Ireland" at "23/06/2017 - 12:16":

I had a "no pets" policy and on move-in day the tenants revealed they have a dog but didn't tell me or the agent as they didn't want to be turned down for the house. We agreed to sign a pet policy and for them to provide an additional deposit. If I couldn't do this, I might have been within my rights to march them straight out the door with their belongings (and 2 children).

Neil Patterson

14:05 PM, 23rd June 2017
About 2 years ago

Hi Heather,

It is a very longstanding criteria with many lenders for at least 20 years so if you could someone would have probably challenged it by now.

bob the builder

10:35 AM, 24th June 2017
About 2 years ago

We should push back - all applicants to have a Guarantor; do an LR check if nothing there then an auto fail. The latest property I put back on the market went on the same day and calls still pouring in, so I am not afraid to say no over and over again.

Mandy Thomson

12:02 PM, 24th June 2017
About 2 years ago

Reply to the comment left by "Dr Rosalind Beck" at "23/06/2017 - 09:24":

In a favourable economic climate, whether someone has a job (or moreover, a decent income) or not is very much down to their own choice. Therefore, if I choose not to work, or I choose an occupation that generates a low income, I can't complain if my options for housing, credit, lifestyle etc are limited - and before anyone criticizes, I was in that very position myself not so long ago.

However, I have no choice over my gender, ethnic origin, disability status or sexual orientation, and as such I have every right not to be discriminated against on those grounds.

Where Ros's Portuguese prospective tenant was concerned, why on earth didn't the lady secure herself a job before she moved to another country or do as many immigrants do when they first move abroad, when they haven't yet secured a stable income, which is house share or board?

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