Tenancy deposits have dropped since the Tenant Fees Act was brought in last year, helping renters across England make an average saving of £163.08, according to new figures.
A landlord has been forced to pay £4,880.89 back to a tenant after over-charging them on their property deposit.
The lucky renter was handed the bumper refund under the Tenant Fees Act which came into force in June last year.
The legislation states that a refundable tenancy deposit must be capped at no more than five weeks’ rent where the total annual rent is less than £50,000, or six weeks’ rent where the total annual rent is £50,000 or above.
It also states that any existing deposit above the cap should be refunded on a new fixed-term tenancy which is created on, or after, June 1, 2019.
The average deposit repayment made to tenants on a renewal has been £317.06, since the new laws were introduced.
Tenancy deposits have dropped since the legislation was brought in, helping renters across England make an average saving of £163.08, according to new figures.
In London, the saving is even greater with rental deposits having fallen by an average of £300.96.
According to the Tenancy Deposit Scheme (TDS), a Government-approved tenancy deposit protection scheme, deposits have typically fallen from 5.5 weeks rent in April to 4.76 weeks in December.
Steve Harriott, Chief Executive of TDS, said: “Handing over a penny to a tenant might seem a bit pointless, but we’re pleased to see that landlords are adhering to the new legislation, no matter how small the refund is.
” The aim of the Act is to reduce the costs that tenants can face at the outset, and throughout, a tenancy. The legislation now means tenants can easily see what any given property will cost them with no hidden costs.
“Our figures clearly show that since the cap was introduced in June last year, it has had an immediate impact, with deposits dropping and the average renter saving £163.08 (or 11.35 per cent).”
The Tenancy Deposit Scheme says it has seen average returns of £317 for renters who’ve signed new contracts with the same landlord since the Tenant Fees Act came into force on June 1, 2019.
The new rules give them stronger rights against law breaking landlords and agents.
Among many things, the new guidelines mean that security deposits are capped at a maximum of five weeks’ rent for tenancies with an annual rent of less than £50,000 – or a maximum of six weeks’ rent for tenancies where annual rent is £50,000 or more.
This means that in cases where the same tenancy is renewed, the landlord or agent must return any part of the deposit that exceeds the deposit cap back to the tenant.
Author: Emma Munbodh
Date: 2nd of February 2020