Plans to cap deposits paid by tenants at one month’s and reservation fees to one week’s rent will make it harder for many renters to find somewhere to live, according to one rental market expert.
David Lawrenson, who runs LettingFocus, a consulting firm for residential landlords, accused the Conservative government of looking for an ‘easy target’ after their damaging result in the general election, in order to restore their credibility.
Writing on his LettingFocus website, Mr Lawrenson points out that most deposits in the private rented sector are currently equivalent to around five to seven week’s rent, depending on the landlord or their agent’s assessment of the risk posed by a particular tenant.
Forcing landlords to reduce these deposits, he argues, is likely to lead to certain types of tenants being excluded.
According to Mr Lawrenson, prospective tenants who are on low incomes or dependent on benefits, students, people with no letting history and no references, and anyone with pets would be regarded as either being a greater risk of not paying their rent or damaging the property.
He says; “All these groups will find it harder to rent if a cap on deposits of a month of rent becomes law. Landlords will simply charge them a higher rent or, more likely, not rent to them at all. So, this proposal will hurt many of the more marginal tenants whose housing options are already limited.”
Instead of capping or banning fees, Mr Lawrenson argues that greater transparency is needed from the big property portals, which do not currently list fees, so renters have access to the information they need in order to decide which property is right for them.
If you’re a landlord worried about the impact of recent government reforms, such as the fee cap or Section 24, on your finances contact Landlord Debt Advisory on 0161 222 4311 or online at landlorddebtadvisory.com.