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Cap could push typical deposits to £1,400 - claim

The government's plan to cap tenancy deposits at six weeks rent threatens to cost Britain’s renters an average of £1391 – and the country up to £6 billion.

The draft Tenant’s Fees Bill, published last week set out government plans to cap tenancy deposits at the equivalent of six weeks rent – rather than the four weeks previously announced – and to ban letting agents' fees.

The government claims that the banning of fees will save renters an average of £350 but campaigning agent Ajay Jagota - who runs an alternative-deposit company - says renters may in future face increased up-front costs of moving home as a result of the extended deposit cap. 

“This law is supposed to address the affordability of renting, but at this rate many renters are actually going to end up worse off" he says. 

Jagota, using average rent figures produced by Homelet, says the average tenancy deposit renters would have to find following the introduction of a six-week tenancy cap, assuming landlords and agents charged the maximum amount, would rise to:

- a national average of £1,391 (average rent £927pcm);

- a South East average of £1,595 (average rent £1,001pcm);


- a London average of £2,390 (average rent £1,593pcm).

A deposit cap of six weeks could also see the overall amount of cash lost to the British economy in tenancy deposit accounts rise from £4.1 billion to £5.9 billion, he says.

“This law is supposed to address the affordability of renting, but at this rate many renters are actually going to end up worse off. Banning letting agents fees supposedly saves renters an average of £350, but by opening the door to a universal tenancy deposit of six weeks rent the same legislation will cost them four times that.

“Many letting agents and landlords currently charge deposits of four weeks rent, but this legislation pretty much puts it in writing that they should be charging six, raising upfront costs to renters by a third. [London Mayor] Sadiq Khan this week claimed the government had ‘bottled’ the deposit cap, and it’s hard to disagree with him."

Poll: Is Jagota right - will deposits because of the cap?


  • Michael Lee

    Yet again no consideration here for the landlord!! Why shouldn’t the landlord have some protection against damages exceeding the rent value to protect against the rising number of tenants who leave a property without paying the last months rent?? Who has to pay for cleaning, removal of items left behind, gardening and damages- THE LANDLORD! Why should they have to foot yet another bill when already having to face stamp duty levy, reform to mortgage rate relief, BTL mortgage reform and potential fee increases from agents in light of the tenant fee ban!!!

  • Neil Moores

    If Ajay Jagota wants to push his alternative deposit scheme could he at least get his maths right. All of the average figures quoted in this article related to lower amounts than his 6 week equivalent, no matter which way you try and do the calculations.


    I think Mr Jagota lives on Venus or somewhere near there that's why numbers are from 48 weeks a year not 52

  • jeremy clarke

    A good tenant who adheres to the rules of the tenancy, pays all rent up to date and leaves the property clean and undamaged will get full deposit back = zero cost to tenant. So where's the problem? Tenants know the rules before during and at the end of a tenancy so it only goes wrong if they break the rules, who's to blame therefore if deposits are lost?

  • icon

    Landlords need protection ! If a tenant can't afford the deposit,I doubt they can afford the rent !
    I am still after 5 years (and having taken them to court) waiting for my damages and rent owed me
    from 3 tenants !
    One I found had a house and I put a charging order on it(I understand now it is sold and have had an alert I set up with the land registry) so should get that soon.
    The others are paying me £50 month ! but even now they are missing payments! what with interest it will take them 10 years to pay me !!!!!!!!!so stop knocking landlords ! we are not the bad boys here.As we have a clown government,I see no hope yet to make a level playing field.


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