Security Deposits cap increased to six weeks rent

by Property 118

13:40 PM, 1st November 2017
About 12 months ago

Security Deposits cap increased to six weeks rent

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Security Deposits cap increased to six weeks rent

The Government will extend a proposed cap on security deposits to six weeks’ rent instead of four, it has been announced today 1/11/2017.

The details were included in the publication of the draft Tenant’s Fees Bill. The Government first announced that they would introduce a cap on security deposits along with a ban on charging tenants fees almost 12 months ago, in the Autumn Statement 2016.

Initially the cap on security deposits was to be set at no more than four weeks’ rent. However, the Government now proposes to extend the cap to six weeks’ rent after concerted lobbying from the NLA.

Chris Norris, Head of Policy at the National Landlords Association (NLA), said: “At the time the NLA argued that an arbitrary cap of four weeks’ rent would be damaging to certain groups of prospective tenants and could have the counter-productive effect of making it harder for some households to secure suitable accommodation in the sector.

“Since the plans were announced we have been lobbying the Government and we met with the Minister of State for Housing and Planning, Alok Sharma MP, in September in order to press him to rethink his plans for a cap; taking into account the needs of those living and working in the private rented sector.

“The NLA is happy that the Government has listened to the evidence we presented on behalf of our members. Whilst we remain disappointed that the Government continues to believe a cap is necessary, extending it to 6 weeks rent will reduce those households and landlords disadvantaged by the policy significantly.”



Comments

Richard U

14:24 PM, 1st November 2017
About 12 months ago

Do we know when this is due to take effect?

Luke P

15:03 PM, 2nd November 2017
About 12 months ago

And when the ban on fees is to take effect too...?

Luke P

10:27 AM, 3rd November 2017
About 12 months ago

I've been reading through the Draft Bill (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/656274/Cm_9529_Tenant_Fees_Bill_Web_Accessible.pdf) and wondered if I'm right in thinking that under Section 1:

"(2) A landlord must not require a relevant person to make a prohibited payment
to a third party as a condition of the grant, renewal or continuance of such a
tenancy."

"(3) A landlord must not require a relevant person to enter into a contract for
services with a third party as a condition of the grant, renewal or continuance of such a tenancy."

Does this means I won't be able to request that a potential tenant obtain a reference (at their own expense), either from a specific service offering or one of their choosing, to present to me in order to satisfy their suitability. Is the Government almost specifically stating I MUST go to the expense myself (it is a condition of certain licences that references be obtained, so the option of going with your gut is taken away too)?

Rob Crawford

20:19 PM, 4th November 2017
About 12 months ago

Reply to the comment left by Luke P at 03/11/2017 - 10:27
That is my interpretation, no fees at all! That means the landlord will now fund references, credit checks, check-in, check-out, tenancy renewals, inventory, agent admin, periodic checks etc etc.

Rob Crawford

20:21 PM, 4th November 2017
About 12 months ago

Reply to the comment left by Luke P at 03/11/2017 - 10:27
That is my interpretation, no fees at all! That means the landlord will now fund references, credit checks, check-in, check-out, tenancy renewals, inventory, agent admin, periodic checks etc etc.

Luke P

20:52 PM, 4th November 2017
About 12 months ago

Reply to the comment left by Rob Crawford at 04/11/2017 - 20:21
I wonder if charging the guarantor for referencing them would wash?

Rob Crawford

6:55 AM, 5th November 2017
About 12 months ago

Reply to the comment left by Luke P at 04/11/2017 - 20:52
I doubt it, that would make the Guarantor a "relevant" person providing a loan". Note: 4)A landlord must not require a relevant person to grant a loan to any person as a condition of the grant, renewal or continuance of such a tenancy.
I doubt there will be any loop holes in this bill. The only option to cover these costs would be to increase your rents!

Terry Pearce

7:55 AM, 5th November 2017
About 12 months ago

The new restriction says "grant, renewal or continuance of such a tenancy." There is nothing to stop a landlord making the checkout fee a condition of the termination of the contract.

Jireh Homes

18:38 PM, 6th November 2017
About 12 months ago

Within the PRS in Scotland the ban of charging tenants any fees has been in force for a few years now, with the Landlord incurring all referencing, lease, renewal, inventory and check-out inspections fees etc. Generally this has been absorbed as an additional cost of business, as not all markets been able to accept rent rises.

Doilygal

18:46 PM, 6th November 2017
About 11 months ago

Reply to the comment left by Terry Pearce at 05/11/2017 - 07:55
Does anyone know if this would be legal - or acceptable?

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