Following the recent news that the Government is backtracking on plans to cap tenancy deposits at six weeks, making the cap five weeks instead, MPs have been accused of “attacking” the buy-to-let industry.
Not only have landlords seen changes such as the 3% Stamp Duty surcharge and the phasing out of mortgage interest tax relief, but now many are feeling frustrated at this further lack of support from the Government.
Politicians have been accused of attacking the buy-to-let industry, for their own political purposes, by making this decision to reduce the tenancy deposit cap.
Commenting on the Government’s tenancy deposit cap announcement, David Cox, chief executive of ARLA Propertymark, has said: “Once again politicians are attacking the industry for their own purposes.
“Tenancy deposits have worked perfectly well for over a decade, and there is no basis in research that these amendments are necessary.
“This move will do nothing but push the most vulnerable in our society away from professional landlords and agents, and into the hands of rogue landlords and agents who will exploit them.”
Franz Doerr, Founder and CEO of tech start-up flatfair, has also commented: “We’re very pleased to see that the Government is taking measures to reduce upfront costs for tenants when renting a home, but it’s simply not the right measure to tackle what we’ve identified to be a huge problem in the rental space.
“Not only does the move leave landlords with very little protection, but it’s also likely to push up rents and make it trickier for tenants deemed higher risk to find suitable homes. Landlords and tenants are better off looking to deposit alternatives like flatfair, where tenants pay no deposit at all, while landlords still get up to 12 weeks’ worth of protection against dilapidations and rent arrears.”
However, Secretary of State for Housing James Brokenshire has stated that this change will save tenants in the private rental sector (PRS) hundreds of pounds, when they enter a new tenancy.
James Brokenshire has said: “Today’s (4th December) amendments will make renting a home of your own more affordable, fairer and more transparent – enabling tenants to keep more of their cash and stopping unexpected costs.
“Everyone deserves a home to call their own. Yet for some renters, moving to a new house can be difficult due to high upfront costs and letting fees.
“This is unacceptable. I want to see a housing market that truly works for everyone, and one which provides a better deal for renters.”
It has also been specified that six weeks of rent will still be required as a deposit for tenancies that have a total annual rent of £50,000 or more.