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Labour is trying to push through a new law that limits the deposit landlords can charge tenants. If they are successful, the most a landlord will be able to charge is three weeks’ worth of rent.
The government is currently proposing an amendment to the Tenants Fees Bill that will limit a tenant’s deposit to six weeks’ worth of rent. Labour wants to reduce this even further to three weeks rent. The average tenant pays £1,150 for six weeks, so if Labour is successful, this figure will drop to £575.
Government Proposals in Parliament
Most tenants already pay less than six weeks in rent as a deposit, so Labour is claiming that the government’s proposals don’t go far enough. They believe that dropping the maximum deposit to three weeks will be of more benefit to tenants.
“Labour is fighting for a fairer deal for all renters. We recognise the private rented sector is the fastest growing area of housing, and it is right that they are not exploited by unfair fees,” says Melanie Onn, Shadow Housing Minister.
Landlords Can Charge What They Like
The average deposit (£1,161) paid by tenants has risen 19% in the last five years, but many tenants pay far more when they sign a tenancy agreement. Most tenants have zero bargaining power and landlords/letting agents can charge what they like, subject to market constraints.
Labour thinks this is unfair, but many landlords rely on deposits to cover the cost of repairs caused by tenants not taking care of their properties. If deposits are capped, landlords will be even more out of pocket.
