If you are a landlord, it is vital that you understand the latest, and upcoming, regulations that will impact on your business. A failure to comply with regulations can cost you money, it can damage your reputation and it may even lead to you being stripped of the ability to serve as a landlord. At Link Up, we know that there is a lot of regulations and rules for landlords to follow, which is why we aim to offer as much guidance and help as we can. If you have been following the Tenant Fees Bill, it looks set to be introduced in 2019 as all political parties have given the bill their backing.
There are many distinct aspects to the bill but one of the most pertinent components is the cap on rent deposits. Initially, the Government was considering a four-week cap on rent deposits, but the bill is set to introduce a six-week cap on rent deposits. Landlords should be aware that this is the upper limit and not necessarily a guideline, but it is likely that many landlords will decide to impose rent deposits at the equivalent of six-weeks’ worth of rent.
The introduction of a deposit cap is of benefit to the industry
While groups representing tenants would have preferred a lower cap, there is satisfaction that there is a cap in place at all. For groups representing landlords, there would have been a preference for a higher deposit cap but there is satisfaction that the cap isn’t lower. This means there is likely to be a general level of agreement about this aspect.
One strong point of the six-week cap comes with the fact that certain groups are not going to be omitted from the rental sector. There were concerns about a four-week deposit cap with landlord groups suggesting that this sum of money wouldn’t be sufficient to cover the risk or costs associated with certain tenants, such as tenants with pets. A six-week deposit cap should ensure that all prospective tenants have the chance to find suitable rental accommodation, if they can afford the deposit.
The Government is focusing on rogue agents
In 2018, the Government is spending a lot of time and effort on clamping down on rogue landlords and creating a fairer environment for tenants. This was seen in the comments made by Melanie Onn, the Shadow Minister for the Private Rented Sector, where she said; “We know that the majority of landlords are good landlords, or strive to be, and understand the expectations upon them before they embark on becoming a landlord. However, a number of rogue landlords and letting agents give the sector a bad name, undermine the good work of quality agents and landlords, and they have squeezed tenants for cash in unfair ways, with disproportionate charges for unjustifiable reasons.”
However, while landlords are happy to accept the six-week deposit cap, it is important that the measures will create new financial pressures for some landlords. There have been studies which suggest landlords will lose out on over £82 million in the first year of the bill while letting agents will lose out on over £157m. These are significant sums of money and it is likely that landlords and letting professionals will need to refocus their energies and ensure they are happy with their budgets and planning for the years ahead.
If you are a landlord in or around Hillingdon and you are looking for assistance in dealing with regulations and business changes, get in touch. At Link Up, we are always happy to help, and we look forward to providing you with confidence when it comes to running your business.