The government’s proposal to cap tenancy deposits to six weeks’ rent will save many tenants money, given that a number of private landlords currently ask tenants for two months’ rent as a deposit, and yet renting reform campaigner Ajay Jagota argues that renters will be worse off unless the government revises its plans.
Earlier this month, the government confirmed that it will extend a proposed cap on security deposits to six weeks’ rent instead of four after first announcing that they would introduce a cap along with a ban on charging tenants fees in the Autumn Statement last year.
Using average rent figures from Homelet, Jagota estimates that a tenancy deposits cap at six weeks rent would cost renters an average of £1,391.
Ajay Jagota, founder of deposit-free renting firm Dlighted, the insurance backed deposit-free renting solution, said: “This law is supposed to address the affordability of renting, but at this rate many renters are actually going to end up worse off.”
Jagota, who would ultimately like to see tenant deposits scrapped altogether, added: “Deposit free renting means landlords and agents renting without risk – the risk of empty properties, the risk of rocketing rent arrears and the risk of unaffordable repair costs or legal fees. It also makes it easier to actually find tenants.
“The government recently announced that 98.5% of cash deposits are returned without a deposit dispute, figures which are worse than the percentage of our tenancies ending in an insurance claim, so there’s little to no evidence that taking a cash deposit improves the behaviour of tenants or the outcome at the end of tenancies either.”