Tenants Saving Since Deposit Cap Introduced
13th February 2020
13th February 2020
The introduction of the Tenant Fees Act has had a significant impact on landlords. With many landlords now unable to charge for a range of commonplace fees, a lot of professionals in the letting industry have found their work to be tougher.
The emergence of deposit caps has also limited many landlords. Some letting industry experts point out they are no longer willing to let to tenants with pets. Previously, landlords who were willing to let to tenants with pets could impose a higher deposit on the tenant. Therefore, this would cover the cost of cleaning the property after the tenant moved out.
However, as there is now a cap on security deposits, this option has been removed for many landlords. Therefore, this means many landlords are now unwilling to let to tenants in this position.
While tenants with pets may have been negatively affected by these changes, it appears as though most tenants have benefitted from these changes. The average saving enjoyed by tenants across England is £163.08.
The Tenancy Deposit Scheme, TDS, states deposits have dropped from an average of 5.5 weeks rent, as of April 2019, to 4.76 weeks rent as of December 2019. This has helped the average tenant save 11.35% or a sum of £163.08. In these challenging financial times, any saving is of benefit, and it is pleasing to see tenants can save a bit of money.
Steve Harriott is the Chief Executive of (TDS), a government-approved tenancy deposit protection scheme, and he said; “Our figures clearly show that since the cap was introduced in June last year, it has had an immediate impact, with deposits dropping and the average renter saving £163.08.”
However, it would be interesting to note the negative impact these changes have had on landlords. With many in the industry worried about a loss of income and balancing the books, the introduction of the Tenant Fees Act is regularly cited as one of the factors that landlords think will drive them out of the market. Even the landlords who aren’t concerned about their long-term future in the industry because of the changes admit that it has become more of a struggle to generate sufficient income monthly.
At Merrys, we see both sides of the argument. More needs to be done to assist tenants, and any financial saving is of benefit. However, there is no point in supporting tenants to the degree that landlords are being penalised at the same time. The Government needs to offer a higher level of support to landlords, and the March Budget will be of interest.
If you are a landlord in Northampton, and you need assistance managing your rental property, please get in touch. There has been a significant number of regulations imposed on landlords of late, but this is an important matter. We are happy to offer guidance in this matter, so please get in touch.