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DPS records drop in landlords exceeding tenancy deposit cap
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Despite the new cap on tenancy deposits, the Deposit Protection Service (DPS) has noticed that more than four out of ten deposits are currently higher than the legal limit.
A cap of five weeks’ rent was introduced on 1st June 2019, affecting most new assured shorthold tenancy deposits, where the total annual rent is less than £50,000. For properties with an annual rent of £50,000 or more, this cap is set at six weeks.
This cap was brought in as part of the Tenant Fees Act, which also bans additional landlord and letting agent charges.
Tenancies that began before the 1st June deadline do not actually have to apply the cap as of yet. However, the requested deposit will have to be adjusted to meet the new requirements whenever an existing tenancy is renewed on a fixed-term basis.
The DPS has recorded that 42.81% of the deposits it currently protects exceed the cap.
However, it is also the case that, since 1st June 2019, there has been a decrease in the proportion of deposits protected by the DPS that have exceeded the cap. This number has dropped 1.46% from 44.27%.
The DPS has reported that this reflects the start of new tenancies with compliant deposits and landlords choosing to adjust proactively larger deposits for existing tenancies.
Matt Trevett, managing director at The DPS, commented: “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.
“Protecting a deposit with The DPS ensures both landlords and renters can have peace of mind during the course of a tenancy – and access to a free, impartial Dispute Resolution Service if they don’t agree when it ends.”
