The Deposit Protection Service has revealed that more than four out of 10 of the tenancy deposits it manages are currently higher than the new tenancy deposit cap.
Since June 1 most new assured shorthold tenancy deposits in England are capped at five weeks’ rent where the total annual rent is less than £50,000, or at six weeks when the yearly rent is £50,000 or more.
Although landlords are not compelled to apply the cap to tenancies that began before the deadline, they must adjust the deposit that exceeds the cap whenever an existing tenancy is renewed on a fixed-term basis.
The DPS has said that 42.8 per cent of the deposits it currently protects stand above the cap.
Matt Trevett, managing director, says: “Our figures show that the tenancy deposit cap will eventually affect a significant proportion of properties around the country. Landlords and letting agents should be ready to make the change whenever a relevant tenancy ends in order to fully comply with the law.”
Since the start of June the proportion of deposits protected by The DPS that exceeded the cap decreased by 1.46 per cent.
The DPS says this reflects the start of new tenancies with compliant deposits and landlords choosing to adjust proactively larger deposits for existing tenancies.