In the Queen’s speech there are plans to limit tenancy deposit to one month of rent and no more.
But this could make it harder for some to find rented accommodation.
This is because many landlords have always flexed the deposit amount to reflect any higher risk they think is associated with a particular tenant type. If they cannot now do this, they may not rent to certain high risk groups.
- So, for example, folks with no lettings history in the UK, (no past landlord references), will be higher risk.
- People whose incomes are low and the housing benefit dependent will also be at a higher risk of not paying the rent.
- Students are often less good at looking after the properties they rent and tend to expect to pay a higher deposit to protect the landlord against damages.
- People who have dogs or cats are higher risk too, because of the higher risk of damage to a property by the animal, plus the possible cost of removing any flea infestation.
With all these groups landlords tend to charge a higher deposit.
The risk is these groups could find it harder to rent if a cap on deposits of a month of rent becomes law, because landlords will simply charge them a higher rent or, in many cases not rent to them at all.
So, this proposal will hurt many of the more marginal tenants whose housing options are already limited.
Letting Agency Fees
Of course, there is a linked proposal to ban letting agents (and possibly landlords) charging any other form of fees to tenants.
This is a a separate proposal, likely to be law soon.
We think this is also unnecessary and could have been dealt with in a much better way, by forcing all letting agents AND all portals like Rightmove and Zoopla to clearly show fees on ALL adverts – which they do not do at present.
What I proposed in a recent article, (at my landlord site), would be that renting a property ought to be like when one buys a can of soup in a shop. In a shop, one expects to see the price for that can to be displayed somewhere you can see it, somewhere clearly visible. Why should renting any different?
Far too radical that idea, obviously!
For more on my proposal on this, read this article.
Tenants looking for property and also searching for good landlords and letting agents would be well advised to buy my book, “Tenants Guide to Successful Renting”.
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