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Tenant deposits to be cut to five weeks after u-turn

Government plans to cut tenancy deposit caps from six weeks of rent to five in the forthcoming Tenant Fees Bill have provoked a strong reaction from within the industry.

The Sun has reported that Chancellor of the Exchequer Philip Hammond has been in dispute with Housing Minister James Brokenshire, with the latter pushing through a move that would mean landlords could charge a maximum of five weeks’ rent as a deposit.

The Residential Landlords’ Association (RLA) has criticised the proposal, feeling it would force rents up and even make landlords to walk away from the industry.

“If this is true, landlords will feel badly let down by a government which says it wants to support good landlords,” said David Smith, Policy Director at the RLA.

“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 the government is taking that will further cut the number of landlords and properties available as demand continues to rise, so actually driving rents up.”

Richard Lambert, chief executive of the National Landlords’ Association, was equally unhappy and asked, “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.”

The new bill has been mulled over for several months, with the Labour Party suggesting that deposits should be reduced to three weeks. It will go through the report stage – a line-by-line examination – in the House of Lords next week and will be given Royal Assent in 2019.

The post Tenant deposits to be cut to five weeks after u-turn appeared first on BuyAssociation.

Source: BuyAssociation

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