As many of you may already be aware the Tenant Fees Act 2019 comes into force on 1 June 2019. The Act dictates that security deposits will be capped at the equivalent of 5-weeks' rent for assured-shorthold tenancies with an annual rent of up to £50,000, or 6-weeks' rent for tenancies with an annual rent of £50,000 or more.
This is a very big change and may not be welcomed by many landlords. Many believe that is another measure the government is taking that will further cut the number of landlords and properties available as demand continues to rise, so actually driving rents up.
The changes will apply to ALL new tenancies entered into from 1 June 2019, alongside any existing tenancies that are renewed on a fixed-term basis. For clarity, this does NOT affect any tenancies which continue on a periodic basis. Also, if new tenancy agreements are entered into (signed) before1 June 2019, these tenancies will not be affected initially, irrespective of when the tenant actually moves into the property, though the cap will apply to any future renewal.
At present, all of the tenancy deposit protection schemes are currently in joint discussions with The Ministry of Housing, Communities and Local Government (MHCLG), in relation to deposits currently protected that will be affected by the cap. As part of these discussions, the deposit schemes are defining the process that will be implemented by all three schemes, following approval by MHCLG.
Everyone hopes that the deposit schemes together with the MHCLG will be able to agree on a process that will require the least amount of administrative effort for landlords and agents and be based on part-repayment of the deposit.
As soon as we have more information on the agreed process we will update you further.
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Press Contact:
Miss. Claire White
W. Why Media
E. claire@whymedia.com
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