Following a less than successful election for the returning Prime Minister, the build up to the Queen’s Speech seemed to be focussed on identifying what manifesto policies would actually survive the inevitable cull to improve its chances of being passed.
One thing not to be dropped was the Government’s pledge to ban all letting fees to tenants. They even went one step further…
Draft Tenants’ Fees Bill
The banning of letting fees to tenants was an aspect of all the major parties’ manifestos, so it comes as no surprise that the battered Tory government would continue with its implementation.
First announced last year in November’s August Statement by the Chancellor, the policy proposals then underwent a consultation that closed on 2nd June. Annoyingly, the election undermined the usefulness of that consultation as agent and landlord workshops with civil servants running the consultation had to be cancelled.
So now a draft Tenants’ Fees Bill has been announced that will implement the policy to ban landlords and agents from requiring tenants to make any payments as a condition of their tenancy, with the exception of rent, a security deposit, a holding deposit and tenant default fees.
No Dogs Allowed
In the initial consultation on the fees ban the Government announced their intention to look at putting a cap on security deposits. While we argued that it was unnecessary, the Government has not listened. Data from our AST statistics show that the average deposit (of those taking a deposit) is 4.92 weeks’ rent.
The details of the draft Tenants’ Fees Bill that were released at the Queen’s Speech also included: a cap of one month’s rent for security deposits.
While not the intention, the Government’s plans for imposing this one-month cap on security deposits will reduce landlords’ willingness to accept pets by removing their flexibility to take a higher deposit to cover for pet damage.
Previous research from the NLA showed that almost half (47%) were unwilling to allow pets, with 41% of those citing the reason as potential property damage.
The Dogs Trust’s Lets with Pets scheme advises landlords to either take a higher deposit or include a “professional cleaning on move-out” clause in the tenancy agreement in order to mitigate the financial risk of property damage.
However, the Government’s plans at present could very well outlaw these practices. The end result? Even fewer landlords willing to let to tenants with pets.
While the full details of what will be included are missing, as a draft Bill it will take longer to go through the legislative process and so receive extra scrutiny and provide more opportunities to be amended.
And we’ll be seeking to do just that.