Tenant deposit cap is cut to 5 weeks by government!

by Property 118

7:02 AM, 5th December 2018
About A week ago

Tenant deposit cap is cut to 5 weeks by government!

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Tenant deposit cap is cut to 5 weeks by government!

The government has now confirmed it will cut the maximum deposit for rentals of less than £50,000 from 6 weeks to a 5 week maximum.  The 6 week maximum will still apply for rentals over £50,000 per year.

This decision as part of the Tenant Fees Bill was criticised the day before by the RLA and NLA: Click here to see the article.

James (Broke thehousingmarket shire), Communities Secretary announced: “Today’s 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.

“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.”

He also confirmed: “Landlords and agents will not be able to write lots of different default fees into a tenancy contract and tenants cannot be charged hundreds of pounds for a damaged item that actually only costs a few pounds to replace.”

Default fees will only be allowed to be charged by landlords or agents for late payments of rent or lost keys.

David Cox, Chief Executive, ARLA Propertymark responded to the news by saying: “Once again politicians are attacking the industry for their own purposes. Tenancy deposits have worked perfectly well for over a decade, and there is no basis in research that these amendments are necessary. This move will do nothing but push the most vulnerable in our society away from professional landlords and agents, and into the hands of rogue landlords and agents who will exploit them.”

David Smith, Policy Director for the Residential Landlords Association said: “In doing a complete about turn on this, it is unfortunately vulnerable and elderly tenants who will suffer, just as Ministers stated when they initially approved a six week cap. Those who will now find it more difficult to secure a home to rent will include those on benefits and those who have a pet as a companion.

“In May, Ministers argued that a cap of six weeks offered a balance between affordability benefits and financial risk to landlords and providing confidence for them to rent to higher risk tenants. They considered that a 5 weeks cap did not offer that protection. Nothing appears to have changed since so Ministers were right then and wrong now.”



Comments

David Price

8:37 AM, 5th December 2018
About A week ago

To paraphrase

Everyone deserves a home to call their own. Yet for some potential owners, moving to a new house can be difficult due to high upfront costs and conveyancing fees. This is unacceptable. I want to see a housing market that truly works for everyone, and one which provides a better deal for owner occupiers.

Start by abolishing SDLT

paul landlord

8:58 AM, 5th December 2018
About A week ago

What a load of b***ocks. Since deposit protections when could a tenant ever be charged 100s of pounds for an item that costs a few pounds to replace. It's difficult enough for a landlord to get the the correct amount in the first place if disputed. "

"I want to see a housing market that truly works for everyone, and one which provides a better deal for renters.”- you know what- SO DO I!! Landlords have always been at the mercy of tenants in the 28 years i been in the game with a legal system weighted against the landlord- we all know the details I don't need to spell it out to you guys.

But you know what- I don't care in this matter-apart from seeing the government again proving they have no clue and proving again their intent to derail the PRD.I stopped taking deposits due to a biased system many years ago. 6 weeks, 5 weeks, 8 weeks- none of these terms get anywhere close to covering the multi thousands of potential repairs, lost rent and court costs.

Private guarantors are my weapon of choice. No guarantor no tenancy sorry. The guarantor can take the risk (touching on another subject here but seeing as Shelter wont ease the problem by acting as guarantors as put to them).

Again any leniency I put forward at times breaking my own rules and putting me at risk out of trying to be a 'good human being' towards the most vulnerable and hard up tenants has been further eroded into making me a hard nosed businessman. I cover my backside more and the vulnerable tenants having greater difficulty in securing a property tenancy.

Clever people our politicians. Love em to bits

David Price

9:10 AM, 5th December 2018
About A week ago

Reply to the comment left by paul landlord at 05/12/2018 - 08:58
To make a deposit worthwhile it should be related not to the rent charged but to the cost of the property and the potential damage that can be inflicted, I would suggest 10% of the asset value.

Annie Landlord

9:29 AM, 5th December 2018
About A week ago

Just twice I decided not to take a deposit because I really wanted to help the tenants (a couple with several children, and a single, older lady) who said they didn't have enough money for a month's rent in advance and a deposit. On both occasions the tenants 'disappeared' overnight. The single lady obviously had major problems, but she posted the keys to me with a letter of apology. The family left two skip-loads of trash for me to pay to have cleared and the house was a tip. So, I do take deposits. I never will again, because if my tenants ever leave (they all say they never will!) I shall sell immediately. It would be far cheaper for councils to underwrite a guarantee or insurance scheme, rather than try to build their way out of this crisis. The building programme will take decades, a guarantee/insurance scheme would take maybe a week or two to arrange?

David Price

10:11 AM, 5th December 2018
About A week ago

Reply to the comment left by Annie Landlord at 05/12/2018 - 09:29
Annie have you ever been taken to court by a no win no fee lawyer claiming a minor error in the deposit protection documentation? When this happens to you, and sooner or later it will, be prepared for a 10k bill even if you win.
It has happened to me even although I have in 18 point lettering on my tenancy agreements that I do not take deposits. A lawyer in a section 21 case claimed that the rent I was collecting was a 'deposit in disguise', fortunately the judge did not believe the lawyer. Nevertheless the case was adjourned for two months for the defendant to prove his case, something which of course did not happen.

ExpertInAField

10:13 AM, 5th December 2018
About A week ago

Reply to the comment left by David Price at 05/12/2018 - 09:10
So you would ask prospective tenants to find deposits of 20-25,000 pounds. If a tenant had that sort of money available, they wouldn't be renting.

Neil Patterson

10:23 AM, 5th December 2018
About A week ago

I know many wealthy people that chose to rent

ExpertInAField

10:35 AM, 5th December 2018
About A week ago

Reply to the comment left by Neil Patterson at 05/12/2018 - 10:23
I am sure there are several wealthy people that rent, but that makes for only a small percentage of the rental market. Most renters are people on average salaries (or none at all...) and a lot of those people on the average salaries would much prefer to be buying their own house as opposed to paying rent to us.

Sam Addison

10:40 AM, 5th December 2018
About A week ago

Reply to the comment left by Neil Patterson at 05/12/2018 - 10:23
Yes but Mark is unlikely to trash the place 🙂

David Price

10:40 AM, 5th December 2018
About A week ago

Reply to the comment left by ExpertInAField at 05/12/2018 - 10:13Better than a landlord having to find £25k to refurbish a trashed property.
Have you ever hired a power tool, a Kango for instance? When I hired such a device I was required to pay the full value of the tool as a deposit (via a credit car allocation). In addition I had to provide evidence of identity and address.

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