Tenant deposit cap is cut to 5 weeks by government!

by Property 118

7:02 AM, 5th December 2018
About 5 days 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

Alan R

10:59 AM, 5th December 2018
About 4 days ago

Selling up when the current tenants move out is definitely an option for me, especially if Corbyn and Co win the next election. Income will reduce of course so I'll have to spend the kids inheritance, but then again if JC does get in, the IHT allowance will probably be cut! Work hard, save hard, provide for retirement, do the right things and get penalised for it...!! Grumpy old man but.... why not. Look at what the daft sods are doing to Brexit - is it any surprise that they're destroying the PRS??

Michael Barnes

12:58 PM, 5th December 2018
About 4 days ago

Will not affect me as I will be selling as properties become empty.

But I may have to evict family from one property with a paper loss so that I can offset against gains from others.

Larry Sweeney

13:09 PM, 5th December 2018
About 4 days ago

Once again, proves how useless the NLA/RLA are. Join the Alliance for real representation.
http://Www.landlordsalliance.co.uk.

David Price

13:20 PM, 5th December 2018
About 4 days ago

Reply to the comment left by Larry Sweeney at 05/12/2018 - 13:09
I regret that the NLA/RLA are worse than useless, they are actually counter-productive.

Larry Sweeney

13:36 PM, 5th December 2018
About 4 days ago

Yes David. Spot on because they give the impression of representation and Government ,Councils etc can say they consulted with landlords. Counterproductive is the most apt description.

Eden Lan

14:30 PM, 5th December 2018
About 4 days ago

As soon as section 21 given to tenant, my tenants stops paying rent that's 2 months out of pocket. If benefit tenant, You can request UC or HB for direct payment after the 2 months till possession, assuming there is no top up from the tenant. But that still leaves you 3 weeks out of pocket as well damages. No point getting a CCJ if it's a benefit tenant, we would never get a penny back. Private tenant slightly better as CCJ can be enforced. Even the 6 week deal RLA came up with was against Landlords. There should be minimum 8 weeks deposit.

ahloughlin@gmail.com

16:06 PM, 5th December 2018
About 4 days ago

I have just used REPOSIT as opposed to taking a deposit. This is an innovative way of doing checks and getting deposit insurance. I think under the new impending law on fees this will be a way of getting checks done and making the tenant pay as no money is taken by LL or agent. Tenant pays insurance company direct and results and indemnity is given to LL or agent.
Would be interested in other LL views.

Luke P

16:31 PM, 5th December 2018
About 4 days ago

Reply to the comment left by at 05/12/2018 - 16:06
I don’t think you can make it a requirement or prerequisite that the tenant do something that costs them. They’ve sewn it up pretty good.

David Price

17:10 PM, 5th December 2018
About 4 days ago

Reply to the comment left by Luke P at 05/12/2018 - 16:31
If the checks are not done then the tenant does not get the property. The rest is up to the tenant, there is no compulsion.

ahloughlin@gmail.com

17:26 PM, 5th December 2018
About 4 days ago

Reply to the comment left by Luke P at 05/12/2018 - 16:31
Could just suggest it as a way forward. Not as a requirement. Contact with company is their decision.

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