NLA attacks rent deposit 'gesture'

by Gary Whittaker

The National Landlords Association (NLA) has criticised new government plans to restrict the deposit individuals have to pay to landlords to no more than one month's rent. 
Ostensibly designed to make renting fairer and cheaper, the plans were contained in the Queen's Speech, which covers the next two years of parliamentary business. The measure was listed alongside other market interventions such as the abolition of letting agency fees. 
However, NLA chief executive Richard Lambert was not impressed. He said the move was a "political gesture" by the Conservatives in a bid to win back some of the voters who turned away from them at the last election. 
Mr Lambert said the NLA estimates around 40 per cent of deposits exceed a month's rent and said there is a danger that if the figure always matches the rent some tenants will see the money as "the last month's rent". This could mean they fail to pay in the final month before moving out, leaving landlords short in the event of any damage being done to the property.
He concluded: "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."
Given that the Conservatives under Theresa May have shifted somewhat from their pro-market position on a range of issues with a willingness to intervene in "dysfunctional markets", landlords could face various challenges of this type in the next few years. 
Indeed, Labour's shift to the left under Jeremy Corbyn means that if he were to win the next election, government policy would go further still down this road. 
The party's manifesto commitments included making three-year tenancies the norm and capping rent rises in line with inflation. 
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23-June-17General Lettings News