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

ahloughlin@gmail.com

17:27 PM, 5th December 2018
About 4 days ago

Could just suggest it as a way forward. Not as a requirement. Contact with company is their decision.

Annie Landlord

20:55 PM, 5th December 2018
About 4 days ago

Reply to the comment left by at 05/12/2018 - 16:06
Not heard of that scheme, but what happens if the tenant doesn't pay the insurance? I presume it would be an annual fee?
I rent one property via a specialist HA and they provide an indemnity policy in place of deposits. Councils could do this quite easily, helping so many people to secure a home and with almost no upfront cost to themselves

Monty Bodkin

8:31 AM, 6th December 2018
About 4 days ago

If considering using an insurance or council bond type scheme instead of a deposit, first find out what the pay out rate is.
Most aren't worth the paper they are written on.
Besides which, tenants need some of their own skin in the game.

Monty Bodkin

9:00 AM, 6th December 2018
About 4 days ago

Reply to the comment left by ExpertInAField at 05/12/2018 - 10:35
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.

"A lot" is using the weasel words of the anti landlord brigade.

If you try saying most people, then the stats don't bear it out -unless you twist them to include people intending to buy *eventually* some time in the future.

Loraine Knights

12:14 PM, 6th December 2018
About 3 days ago

I'm selling up as and when my houses become vacant. Three sold, four to go ! After 15 years in business am fed up with all this landlord bashing. Have excellent tenants at moment but have had some horrors who have trashed the property before the bailiffs arrived as council told them to stay put - strangely enough those ones came via the council whose insurance bond nowhere near met rental arrears / damage !

Gromit

8:49 AM, 8th December 2018
About 2 days ago

Would anyone know if in the proposed legislation whether taking a "last month's rent" at the outset of a tenancy is permissible?
Quite a few years ago when I lived temporarily in the USA I rented a property and had to pay upfront a Deposit, first months rent and last months rent.

Annie Landlord

10:00 AM, 8th December 2018
About 2 days ago

Reply to the comment left by Gromit at 08/12/2018 - 08:49
Taking the last month's rent as well as the first, and a deposit, is still certainly the norm in Florida. Don't know about elsewhere in the US.

CrocadileBoy

10:01 AM, 8th December 2018
About 2 days ago

I’m the past I’ve given the benefit of doubt to less than perfect applicants in return for a higher deposit to protect myself. Looks like that’s about to stop, so once again the government is punishing those it thinks it’s helping!

Bristol Landlord

15:36 PM, 8th December 2018
About A day ago

I really can’t see the point in this change of 5 weeks versus 6 weeks deposit except for making it slightly cheaper for a tenant to move in to rented accommodation and at the same time making it slightly less attractive for landlords to stay in the PRS. In my view this change is just part of a bigger agenda to “encourage” the smaller portfolio BTL landlords to leave the PRS, by making the regulations so onerous and by increasing the risks, and replacing them with large corporate landlords. Once the corporations have taken over the PRS you may see that magically the regulations become easier.
Also the councils can’t possibly provide all the social housing they are required to do, at the same time the corporate landlords want to get in on the action. So the perfect solution for the government is for large scale private corporate landlords to take over the PRS. Possibly the corporations also provide the council housing as well, for a price. It’s a perfect scheme, the government gets “sponsorship” from the corporations, the councils then only have to provide none or much reduced amounts of housing, the corporations make bucket loads of money in rent (just wait for them to massively put up the rents), and the small BTL landlords either get out of the business or if they stay then they put up the rents to survive and the tenants get screwed by rising rents either way. I could possibly see a future scenario of the corporate landlords dominate the PRS and provide social housing in place of the councils. The tenant either has a corporate landlord, or a surviving BTL landlord if he can find one, or a corporate provided council house. A really scary situation would be if the government mandates rent control on the small BTL landlord and forces them to provide rent controlled social housing to the more undesirable social tenants, the rejects from the corporate landlords.
This situation is just a possibility but we have seen privatisation of the railways (a disaster in my opinion), the current ongoing drive to privatise the NHS (a disaster in the making) so why not privatise the council housing and let large corporations take over the PRS ( another disaster in the making). It’s par for the course with UK Governments who are too greedy, corrupt, incompetent and dim witted to see the damage they are causing. I hope I’m wrong about this but we shall see.

Gromit

15:56 PM, 8th December 2018
About A day ago

Reply to the comment left by Annie Landlord at 08/12/2018 - 10:00
It was in California when I was there.

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