Landlords would be ‘badly let down’ by the government if it cuts its new deposit cap from six to five weeks – a move which would also make it harder for people to find homes to rent.
A press report over the weekend claimed a reduction in the maximum level of security deposit landlords will be able to charge is now on the cards.
The cap, being introduced under the new Tenants Fees Bill next year, was set as six weeks rent back in May this year.
The Residential Landlords Association (RLA) has now issued a joint statement with the National Landlords Association (NLA) condemning such a move.
The RLA said a six week cap is the minimum acceptable and a reduction could force landlords out of the market altogether.
This would both hit supply and push up rents, with tenants – particularly those deemed ‘higher risk’ – finding it even harder to rent a home.
David Smith, Policy Director for the RLA 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 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.”
In May this year the government said: “A cap of six weeks’ rent offers greater affordability benefits to tenants whilst minimising the financial risk to landlords and allowing them greater flexibility to accept higher risk tenants such as those with pets.
“We can see the benefits of a cap at five weeks’ rent in terms of improved tenant affordability, but a cap of six weeks’ rent could better support both landlords and tenants by giving landlords greater financial flexibility.”
Richard Lambert, Chief Executive Officer 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.”
The Tenant Fees Bill has completed its passage through the House of Commons and is nearing its final stages of consideration in the House of Lords.
Read more about the bill here.