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TODAY'S OTHER NEWS

Are UK rental deposits too high? Not by international standards…

The typical UK private rental deposit, often considered high in this country, is thought to be relatively low by international standards according to a new study.

Deposit replacement scheme Ome has looked at comparative deposits from 15 nations.

In England and Wales a tenant currently pays an average of £1,139, although across the UK as a whole (so including Scotland and Northern Ireland) this reduces to £811. 

The tenant fees ban means that agents and landlords can now only charge five weeks’ rent as a deposit in most circumstances. 

Ome says that while this might still seem high, there are tenants around the globe with a much larger financial obstacle.

For example in Japan, where 38 per cent of the population rent, tenants pay 10 months rent as a deposit, meaning an upfront cost of £6,145.

In Denmark deposits are based on three months’ rent, with a further three months paid upfront, so requiring £4,432. 

Like Japan, South Korea also requires tenants to pay 10 months’ rent as a deposit, costing £4,360 on average.  

US tenants face paying as much as three and a half months’ rent upfront £3,547, with some states allowing agents and landlords to charge what they want with no statutory limit on deposit size.

Swiss tenants are required to pay as much as three months’ rent to secure a rental property, coming in at an average cost of £3,542.

The full list is as follows:

Japan, 10 months’ rent: £6,145;

Denmark, three months’ rent and three month deposit: £4,432;

South Korea, 10 months’ rent: £4,360;

United States, up to 3.5 months’ rent: £3,547;

Switzerland, up to three months’ rent: £3,524 

Germany, three months’ rent: £1,860;

Austria, three months’ rent: £1,839;

Israel, two months’ rent: £1,598;

Canada, two months’ rent: £1,488;

Australia, six weeks’ rent: £1,269;

France, two months’ rent: £1,146;

UK, five weeks’ rent: £811;

New Zealand, up to four weeks’ rent: £743;

Turkey, up to three months’ rent: £527;

Sweden, usually no deposit, £0.

  • Phil Priest

    Ooh this is an interesting topic and I expect the comments to be excessive.

    From a landlords view, I invest a large sum (25% of the property value) to secure a buy-to-let as an investment. So why should someone get to use that item for a measly 5 weeks of the annual rent?

    If a higher deposit was required, the ability to transfer it between rental properties effectively result in fewer tenants leaving the properties in a state of disrepair?
    If you were required to invest £000's in somewhere to live would you take more care of it?

    The move to reduce the amount only achieves tenants placing less value on where they live, in some cases.

    If everyone treated everything they rented as they would as if they owned it themselves the world would be a good place.

  • Angus Shield

    When the 5 week multiple was first announced we all expressed outrage at the stupidity of it.

    Our rent arrears vacations events are extremely low and with the snails-pace of the courts lists to hear a case, most Landlords have to mitigate the lost rent and employ the meagre deposit for the cleaning and delaps.

    We used to take 1.5x months rent as a deposit and it usually covered needs on the rare events.

    I wonder if there is a rent arrears table for the countries listed; I bet there aren't any with those levels of deposits!

  • icon

    Interestingly Sweden no deposit. Give the story please to go with the figures. I know in Sweden if you are in arrears the local Government collect the debt for the landlord. Hence not required!

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