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Government clarifies Holding and Tenancy deposits provision in Fees Bill

The government has written to two senior MPs in a bid to clarify two detailed provisions in the Tenants Fees Bill, currently making its way through Parliament.

Conservative MP Peter Bone and Labour MP Virendra Sharma raised issues at the first session of the Public Bill Committee on the Tenant Fees Bill, held earlier this month.

Now, in a letter written by junior housing minister Rishi Sunak, the government has clarified two points.


Sunak’s letter is brief and on Holding Deposits it reads: 

I promised to confirm the timescales with regards to holding deposits. The Bill provides that landlords and tenants will usually have 15 days to enter into a tenancy agreement once a holding deposit has been paid. This is the deadline for agreement and during this period, landlords, agents and tenants should take all reasonable steps to enter into a tenancy agreement. Landlords and agents may agree a different deadline for agreement with the tenant in writing. 

Landlords and agents must refund the holding deposit in full within 7 days of:

- The landlord and tenant entering into a tenancy agreement before the deadline for agreement; 

- The landlord choosing to withdraw from the proposed agreement; or

- The deadline for agreement passing without a tenancy having been agreed. 

On Tenancy Deposits, Sunak says:

I also promised to share the data with the Committee from Scotland, which strongly suggests that capping deposits will not lead to such a cap becoming the default. In Scotland, the data shows that actual deposit rates are running at around £580 to £730, when the maximum allowed under the cap is, on average, £1286. This compares to a 2 bedroom average rent of £643 per month in Scotland in the year to September 2017, as published in the Private Sector Rent Statistics

The Tenants Fees Bill is expected to become law at some point next year.


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