The National Landlords Association has hit out at plans, announced in the Queen’s Speech, to cap deposits.
Under the government plans, the deposit renters have to pay to their landlord at the beginning of a new tenancy will be capped at one month’s rent. The government claims the measure will make renting fairer and more affordable.
Richard Lambert, chief executive of the NLA, slammed the move, however, saying it was nothing more than a ‘political gesture’.
In a statement, Mr Lambert said that the plans would create a danger of tenants seeing the deposit as the ‘last month’s rent’, meaning some could fail to pay in the final month of their tenancy, leaving landlords short if damage had been done to the property.
He said; “Some landlords use a higher deposit to give them the extra confidence they need when letting to higher risk tenants, so this could also have the unintended consequence of deterring them from offering their property to those likely to be struggling with affordability in the first place."
The proposed cap on deposits was announced alongside other planned interventions into the private rental market, including a ban on tenants being charged fees by letting agents. The planned ban on letting agent fees has led to concern amongst landlords that agents may pass these costs on to them, which in turn could lead to higher rents.
David Cox, chief executive of the Association of Residential Letting Agents, said; “A ban on letting agent fees will cost the sector jobs, make buy to let investment even less attractive, and ultimately result in the costs being passed on to tenants.
“It’s unlikely the government had enough time to analyse all of the responses from the consultation, as it only closed on the 2nd June. It appears they had already made their decision and therefore the consultation was no more than a ‘tick box’ exercise and they haven’t appropriately taken the industry’s views into account.”