Despite claims from the Government that it wishes to provide more support to landlords and the private rental sector (PRS), the decision to cap tenancy deposits at six weeks has now been changed to five.
The Residential Landlords Association (RLA) and the National Landlords Association (NLA) have both voiced their concerns over this news.
In response to the reports of the Government’s decision to do a U-turn on the tenancy deposit cap, David Smith, Policy Director for the Residential Landlords Association commented: “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 up rents up.”
David Smith has also commented: “In doing a complete about turn on this, it is unfortunately vulnerable and elderly tenants who will suffer, just as Ministers stated when they initially approved a six week cap. Those who will now find it more difficult to secure a home to rent will include those on benefits and those who have a pet as a companion.
“In May, Ministers argued that a cap of six weeks offered a balance between affordability benefits and financial risk to landlords and providing confidence for them to rent to higher risk tenants. They considered that a five week cap did not offer that protection. Nothing appears to have changed since.”
Richard Lambert, Chief Executive Officer of the National Landlords Association has 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.”
The RLA has previously proposed that the cap should even be extended to eight weeks, to provide landlords with a way to cover extra costs, in case a tenant fails to pay their final month’s rent.
Landlords, remember that, if you are worried about tenant rent arrears, you can take out Just Landlords’ Rent Guarantee Insurance, to give you peace of mind. You can get a quote on their website at www.justlandlords.co.uk/rentguaranteeinsurance.