Tenants deposit cap confirmed

Landlords and tenants can have difficult relationships. Landlord’s are primarily responsible for ensuring that their rental properties are fit to live in, whilst tenants may have their own expectations for the property and what their monthly rent is expected to cover.

The dynamic of this relationship has recently changed too as the government has confirmed that deposits on a rented home will be limited to five weeks rent as opposed to six. The move has been announced as part of the Tenant Fees Bill and is a further step by Communities Secretary, James Brokenshire, towards lowering fees for tenants.

The deposits are used to cover the risk of damage or unpaid rent but what does this really mean for tenants and landlords alike?

For tenants this is seemingly good news. The upfront cost of moving into a new rented property will be lower which should allow more people to start renting.

However, with less financial security less likely to cover unpaid rent and damages, landlords could be more cautious about who they are letting their properties out to. This could make it more difficult for those with pets or poor credit ratings to find a suitable home, so there are benefits and negatives for both groups.

Other amendments to the Tenants Fees Bill include protecting tenants from unfair fees by limiting the type of default fees that can be charged by landlords and property agents. This change means that during the tenancy landlords and agents will only be able to charge fees to replace lost keys or for late rent.

Landlords will still be able to claim back costs for damage through the tenancy deposit at the end of the tenancy. If you want to discuss your options contact one of our advisers today.