Private renters are set to benefit from new measures reducing the
amount tenants have to pay up front to secure a home from 6
weeks’ rent to 5 for annual rentals of under £50,000.
The move, announced as part of the Tenant Fees Bill, is a
further step by Communities Secretary MP towards ending costly
fees imposed on tenants when they first move into their property
- creating a fairer housing market that works for everyone.
Around 1 in 3 renters who currently pay a deposit are set to
benefit from the change - saving tenants £64 million in the first
12 months by keeping more of their hard-earned cash, while also
making sure landlords are able to recover costs in the event of
damage to their property.
The new cap will apply to properties where the annual rent is
less than £50,000. A deposit of 6 weeks’ rent will continue to
apply where the annual rent is £50,000 or more.
Communities Secretary Rt Hon MP said:
Today’s amendments will make renting a home of your own more
affordable, fairer and more transparent – enabling tenants to
keep more of their cash and stopping unexpected costs.
Everyone deserves a home to call their own. Yet for some
renters, moving to a new house can be difficult due to high
upfront costs and letting fees.
This is unacceptable. I want to see a housing market that truly
works for everyone, and one which provides a better deal for
renters.
Other amendments to the Bill include protecting tenants from
unfair fees by limiting the type of default fees that can be
charged by landlords and property agents.
This change means that during the tenancy landlords and agents
will only be able to charge fees to replace lost keys or for late
rent. Landlords will still be able to claim back costs for damage
through the tenancy deposit at the end of the tenancy. However,
landlords and agents will not be able to write lots of different
default fees into a tenancy contract and tenants cannot be
charged hundreds of pounds for a damaged item that actually only
costs a few pounds to replace.
It builds upon comprehensive measures taken by ministers to
increase protection for tenants and drive up standards in the
private rental sector, including:
- scrapping letting fees charged by both landlords and letting
agents, which can cause a significant affordability problem for
tenants and are often not clearly explained
- capping holding deposits at no more than 1 weeks’ rent and
ensuring landlords and agents return holding deposits to tenants
within 14 days
- capping the amount that can be charged for a change to a
tenancy at £50 unless the landlord can demonstrate that greater
costs were incurred
The deposit cap of 5 weeks’ rent only applies to properties where
the annual rent is less than £50,000. A deposit cap of 6 weeks’
rent will apply where the rent is £50,000 or greater. Properties
where the annual rent is greater than £100,000 are out of scope.
