Rental Deposits To Be Capped
If you are a landlord whether that be one who has been involved in the but-to-let market for a number of years, someone who has recently entered the market or you are considering purchasing your first investment property to let out to tenants then you may be interested to note that it was recently announced in the Queen’s Speech that there is to be a cap placed upon the level of deposit a landlord can insist on.
Landlords will only be able to hold a deposit of one month’s rent. This decision may concern some landlords. In fact, it is estimated by the National Landlords Association that in the region of 40% of deposits are for in excess of 40% of one month’s rent.
Some landlords may be concerned that this is not a big enough deposit. This could be because there will be a number of prospective tenants who landlords feel are more likely to not take care of the landlord’s property and that the deposit is no where near enough to cover the cost of any repair work. This may mean that some landlords will be reluctant to allow some people on lower incomes to become tenants in their properties. This could lead to their being a problem in housing people that are particularly in need of finding suitable accommodation.
It will be interesting to see if this announcement in the Queen’s Speech will result in some people that were considering becoming landlords deciding against this. Will some of those landlords who are presently letting out their investment properties to tenants on benefits review their decision as the tenancy agreement comes to an end and ask those tenants to vacate the property?
Perhaps such data may be produced by the likes of the National Landlords Association at some point in the future. If it becomes available, we will do our best to provide some of it.