Minister caps security deposits for private tenants

Security deposits for private tenants starting a new buy to let tenancy will face a five week rent limit from next year.

The new law will become part of the Tenant Fees Bill, currently its way navigating through Westminster.

Communities Secretary James Brokenshire has lowered the limit from six weeks’ rent after intense lobbying from housing charities.

He announced the five week limit will apply to all tenancy agreements worth £50,000 a year or less, while the cap remains at the equivalent of six weeks’ rent for higher value tenancy agreements.

The Department of Housing, Communities and Local Government believes the measure will save one in three private renters a total of £64 million a year in costs for setting up new tenancies.

“The 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,” said Brokenshire.

“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.”

Under the new Bill – which only applies to England – landlords and letting agents will only be able to charge tenants for replacing lost keys and to collect rent arrears.

Any costs for repairs or to replace damaged items will come from the security deposit at the end of a tenancy.

“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,” added Brokenshire.

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