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Tenant Fees Bill Update on Security Deposits

5 Dec 2018
Tenant Fees Bill Update on Security Deposits

The Negotiator Magazine has announced, this morning, that the Government has confirmed that further amendments to the Tenants fees Bill have been confirmed:

  • Security deposits to be capped at fives weeks’ rent for tenancies under £4,166 PCM or £50,000 PA.
  • Default fees chargeable to tenants will also now be limited to just the costs of replacing lost keys or recouping late rent.

These amendments were announced yesterday as the Bill passes through the House of Lords before it becomes law in April next year.  The amendments have prompted a furious response in a joint statement from the National Landlords Association and Residential Landlords Association as it is feared this will cause a further exit of investment landlords from the market, leaving an even shorter supply of rental property than at the current time (which is already low).  Housing secretary James Brokenshire was adamant, however, that the new Tenant Fees Bill will have a positive effect on tenants and save them £64 million during the first 12 months after the legislation becomes law.  Provided, of course, that supply does not drop, causing rents to rise.

You can watch the debate in the House of Lords here

Northfields MD Richard Palfreeman confirmed that his company are already exploring ZERO DEPOSIT INSURANCE SCHEMES, which will cover delapidations or unpaid rent at the end of the tenancy, and be far more affordable for tenants than even the new security deposit amount. Of course, it will be incredibly important for Landlords to ensure they are

properly vetting their tenants and are carrying out timely property visits throughout the tenancy, in order to minimise any requirement on the security deposit at the end of the tenancy.

For more information please contact Aimee, our Area Lettings Director for more information.