Deposit cap could lead to more disputes in PRS

Deposit cap could lead to more disputes in PRS

Todays other news
There are some locations offering incentives to British investor buyers...
The market is strong ahead of the April stamp duty...
The PBSA analysis has been undertaken by Knight Frank...
The analysis has been done by Bond Wolfe...


Government proposals announced in the Queen’s Speech in June to cap tenancy deposits at no more than one month’s rent could lead to an increase in formal deposit disputes in the private rented sector (PRS), according to regulatory trade body the Association of Independent Inventory Clerks (AIIC).

It has been proposed that holding deposits are capped at no more than one week’s rent and security deposits at no more than one month’s rent – down from the current level of two months – as part of several measures designed to “make the private rental market more affordable and competitive”, the government said.

But the AICC is concerned that as tenants will be committing less money to cover damages at the start of a tenancy, they may take a more “laissez faire approach to the rental property”, leaving landlords with more damage and repairs to deal with, resulting in a higher number of formal deposit disputes.

Formal deposit disputes occur when tenants and landlords cannot agree over proposed deductions taken from the damage deposit at the end of a tenancy.

 “A cap on security and holding deposits is certainly more positive than an outright ban as has been proposed for up front letting agent fees charged to tenants,” said Danny Zane, joint chair of the AIIC. “However, we are concerned.”

Emma Glencross, joint chair of the AIIC, accepts that some tenants are finding damage and holding deposits unaffordable, and a cap on deposits will certainly help them when looking for a rental property. However, she is worried that the lower sums of money involved may encourage renters to take less care of their rental properties.

“Both landlords and tenants want to avoid deposit disputes at all costs and this government initiative could, in some cases, have unintended consequences,” she said. 

Share this article ...

Join the conversation: Login and have your say

Want to comment on this story? Our focus is on providing a platform for you to share your insights and views and we welcome contributions. All comments are screened using specialist software and may be reviewed by our editorial team before publication. Property Investor Today reserves the right to edit, withhold or delete comments that violate our guidelines, including those that harass, degrade, or intimidate others. Users who post such content may be banned from commenting.
By commenting, you agree to our Commenting Terms of Use.
Recommended for you
Related Articles
The financial success of your buy-to-let depends on the investment...
The agency Watling Real Estate has been instructed to market...
Construction industry consultancy Glenigan says the new government is already...
Co-living is emerging as an alternative approach to delivering high...
Spain’s draconian new tax is already spooking British investors...
The Budget has forced a revision of forecasts for the...
Prices and sales volumes will grow in 2025 despite the...
Recommended for you
Latest Features
There are some locations offering incentives to British investor buyers...
The market is strong ahead of the April stamp duty...
The PBSA analysis has been undertaken by Knight Frank...
Sponsored Content
As the property industry shifts towards sustainable practices, Inspired Property...
Are you concerned about rising interest rates and their potential...
In the ever-evolving landscape of property investment, staying ahead of...

Send to a friend

In order to send this article to a friend you must first login. Click on the button below to login or sign up.

No one likes pop-ups ...
But while you're here