Dismay as Government ‘wants to limit tenants’ deposits to five weeks’ worth of rents’

Caps on security deposits could be reduced from the equivalent of six weeks of rent to five in new legislation going through Parliament.

The Sum said that this is now the plan – despite earlier reports that last May, the Government had successfully defended its decision to cap deposits at six weeks’ worth of rent.

David Smith, policy director for the Residential Landlords Association, criticised the move revealed as  the Tenancy Fees Bill progresses through Parliament.

He said: “If this is true, landlords will feel badly let down by a Government which says it wants to support good landlords.

“The Government had accepted that a cap of six weeks was the minimum many landlords required.

“This is needed to address the problem of tenants who fail to pay the last month’s rent and leave a property damaged.

“Ministers claim that they want to cut the cost of renting yet this is another measure  that  the Government is taking that will further cut the number of landlords and properties available as demand continues to rise, so actually driving up rents up.”

Richard Lambert, CEO of the National Landlords Association, said: “A six-week cap is the lowest landlords find acceptable.

“Does the Government really not realise that if landlords don’t think the deposit covers the risk of damage or unpaid rent, they will be even more cautious about who they let to?

“All this will do is make it harder for tenants with poor credit ratings or who want to have a pet to find a suitable home.

“This is clearly a political move aimed at the renters’ vote. It is not a policy for business.”

 

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16 Comments

  1. Rayb92

    We will be staying well clear of tenants presenting the slightest risk I’d rather leave a property empty longer now with this and wait for the right tenant.  A homeowner guarantor will become mandatory now with us when this comes in
    as stated it’s  just more campaigning for generation rent votes but the tenants are paying a stee price hope they can see that

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  2. Eric Walker

    If correct this could make renting more expensive for tenants. Landlords may favour a tenant who pays extra for a deposit replacement scheme which may provide more security than a straight 5 weeks deposit.

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  3. jeremy1960

    Every day with government is becoming a nightmare at the moment,  as each day passes parliament just proves how far detached from reality they are! Just watching the debate on TV last evening with Mkke Ashley who owns sports direct and who rescued House of Fraser showed how very little MPs who exist within the walls of Westminster know or understand about business .

    Now has to be the time when housing needs to be taken from the grabbing hands of government and handed to an expert committee to shape the future even if that means we have to listen to someone from  shelter whining on! If we are not careful, very soon, not only will there be nobody fit to run the country but we will not have an industry to protect!

    Deposit protection schemes may work initially but, they will cost tenants more, they are unregulated and, as the schemes start paying out either costs will rise more or operators will disappear and there will be zero protection for tenants or landlords.

    Who will stand up for us against the bully in the playground that calls itself government?

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    1. RosBeck73

      The new Landlords Alliance seems to be the only organisation prepared to take a tough stance and stand up for landlords. If anyone here – landlord or letting agent – hasn’t joined yet, they should consider it. It costs £100 for the year. Larry Sweeney – who runs it – got an interview last week on BBC4 Radio You and Yours and he spoke up about Shelter hounding Ludlow Thompson, amongst other things.

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      1. kittygirl06

        I think the Landlords Alliance offers the last hope for the sector I would advise all landlords and letting agents to join. The RLA and NLA are guilty of appeasment remines me of Chamberlain and thank god for Chruchill .    We are being bullied by Government and the propaganda of the likes of Shelter and Generation Rent. At least Larry from the Alliance is making a stand and we should get behind him for the way its going landlords will be burnt and taxed to death.  
        Is there not talk of confisgating  landlords assess’s?
         

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      2. Gromit

        NLA/RLA went to the same school of appeasement as Theresa May, just rolling over doesn’t (and never did) cut it.

        I agree time for talking (to a Government who refuse to listen) is over, and some real action is required. Only the Landlords Alliance has got the b***s to to take up the fight.

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      3. Rent Rebel

        Larry Sweeney came over like a proper clown, totally humiliated himself.

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  4. Will

    Of course there is a point that such legislation could mean that all deposits will become 5 weeks irrespective! and if more security is needed the one or more guarantors will be sought.

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  5. Stokeagent51

    I would advise all landlords to up the rent by about 5% and tuck this money away, that should cover the shortfall and it is guaranteed with no deposit scheme dealings.

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  6. Woodentop

    Lunacy (will I be censored?). All that will happen is rents will go up to cover the higher risk. As it stands 6 weeks does not cover two months rent arrears (minimum for Sec 8 notice), is gobbled up in the blink of an eye when damage is caused.
     
    Ah says the government, take out insurance! Yes please says the insurance industry … but not for free and terms and conditions apply … oh you are having difficulty in referencing the tenant (enter one of many exclusion clauses). Who pays the premium? … ah the landlord … err no the tenant through increased rent for that is a cost that has a to come out of the letting or does government think that landlords are supposed to have a fairy godmother with a money tree to gift these expenses!  
     
    Many tenants see no punishment for walking away with £k’s arrears, causing damamge and living off the housing benefit to fund their personal lifestyle!!!  
     
    Downside … many, if not the majority of landlords will start to stay away from DSS and the like = more homeless. All, including good tenants will be paying more rent.  
     
    Answer: Criminalise tenants behaviour with the same level of vigour as adopted towards landlords and agents.

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  7. Wanderer

    This may also cause further work for the Courts as landlords should be advised to take the full dilapidations costs from the deposit and any remaining rent arrears that aren’t covered by the deposit should go to the Court for a CCJ. It won’t guarantee that the money is ever seen again but at least there’s a slim chance of it being paid at some point, and other landlords will be made aware of a potentially bad tenant when they are next referenced.

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  8. Deltic2130

    Just when you thought it really couldn’t get any worse…

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    1. Gromit

      The Government has a whole department (called the BTR brigade) looking at ways to s***w the PRS in favour of large corporates. 

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  9. The_Maluka

    Yet another example of the anti Midas touch of this wonderful government.  Everything it touches turns to crumbling stone to fuel the sandy desert which is becoming the norm for benefit tenants.

    I wish that I, a landlord, was as expert in politics as our politicians are expert in the PRS.

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  10. PossessionFriendUK39

    The Govt have as much understanding of the PRS as I have of Rocket science.

    Couple of months ago,  they were banging on about landlords accepting pets.  It WAS  pointed out to them, that where this was a possibility, the landlord would be wanting a higher Deposit.

    Now, they want to reduce the deposit. Newton’s 3rd law,  For every action,….

    Landlords will just increase rents to compensate for loss in deposit.

    Pretty much most of the policies from the Govt have caused Increased rents.

    see   https://www.surveymonkey.co.uk/r/8q8c6p7

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  11. Rent Rebel

    All the landlords decrying this, threatening to only take tenants with guarantors now. As if power-abusing landlords haven’t long been doing that already even with 6 weeks security deposit (sometimes literally) in their pocket. Here you are, like porn stars, telling tenants to ‘get on their knees and beg’, to shower you with all the proof that a mortal can muster – rather than ever concede any inch of power and profit. Most tenants seek to live peacefully and don’t trash their homes.

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