There has been widespread Industry anger at news of a possible U-turn by the government over the proposed cap on security deposits.
The Sun newspaper has suggested that the government will reverse a decision to cap tenancy deposits in rented housing at six weeks and reduce this to five.
In May this year the government defended its decision to cap deposits at six weeks rent.
Responding to a recommendation from the Housing, Communities and Local Government Select Committee to reduce it to five weeks, the government said: “We are not accepting this recommendation. We share the Committee’s desire to improving affordability and fairness in the private rented sector and have considered their recommendation carefully. A deposit of six weeks’ rent will be an upper limit and not a guideline. There is a balance that must be struck between providing tenants with greater affordability whilst ensuring landlords have adequate financial security for their assets.”
The Sun suggests the government has now gone back on that statement.
David Smith, policy director for the Residential Landlords Association, has led industry anger at the suggestion. He says: “If this is true, landlords will feel badly let down by a government which says it wants to support good landlords. The government had accepted that a cap of six weeks was the minimum many landlords required. This is needed to address the problem of tenants who fail to pay the last month's rent and leave a property damaged.
“Ministers claim that they want to cut the cost of renting yet this is another measure the government is taking that will further cut the number of landlords and properties available as demand continues to rise, so actually driving up rents up.”
And Richard Lambert, chief executive of the National Landlords Association says: “A six-week cap is the lowest landlords find acceptable.
“Does the government really not realise that if landlords don’t think the deposit covers the risk of damage or unpaid rent, they will be even more cautious about who they let to? All this will do is make it harder for tenants with poor credit ratings or who want to have a pet to find a suitable home.
“This is clearly a political move aimed at the renters’ vote. It is not a policy for business.”