What are the Deposit rules in conjunction with tenant fee ban

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With the tenant fee ban coming into effect on the 1st of June, it is important that landlords are aware of the rules and regulations. There are different issues to contend with and the matter of deposits will be under the spotlight. This has been an area of great debate and discussion in recent years and it is likely that many parties will still have strong opinions on deposits with respect to the tenant fee ban.

There has been confirmation that for the majority of tenants, deposits will be capped at the equivalent of five weeks’ rent. This will be the case when the annual rent is up to £50,000 but for properties where the annual rent is larger than £50,000; the deposit cap will be six weeks’ rent.

Many bodies have raised concerns on behalf of landlords

David Smith is the Policy Director of the Residential Landlords Association, RLA, and he has spoken on behalf of the organisation, who believes that landlords will feel as though they have been let down by the Government. David Smith said; “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.”

The National Landlords Association have also spoken out about these changes deeming it to be a reckless move and one that could lead to some landlords exiting the market. Richard Lambert is the Chief Executive of the NHA and he 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.”

Landlords need support in their dealings with tenants

Given that landlords are required to place a tenants’ deposit into a Government-backed scheme, it is not as though landlords are taking this money for themselves. Therefore, the concerns regarding the deposit cap are more about the message it sends to tenants and whether this cap provides enough protection for landlords.

Tenants know if they fail to maintain the condition of the property, their deposit is at risk. The larger the sum of money, the greater the level of incentive for tenants to care for their property. This can help the landlord to find their ideal tenant and it means the tenant will be far more likely to liaise and engage with the landlord in the most appropriate manner.

It is easy to see why many landlords have concerns about the deposit cap and the impact it will have on their property and their relationship with tenants. If you are a landlord looking for guidance when it comes to managing your property and dealing with tenants, get in touch because I am always happy to help.

Matylda Nowak

CEO, Kings Accommodation


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