The Deposit Protection Service (DPS) has revealed that 42.81% of the deposits it currently protects are higher than the new tenancy deposit cap.
Since 1 June 2019, most new assured shorthold tenancy deposits in England are capped at five weeks’ rent where the total annual rent is less than £50,000, or at six weeks when the yearly rent is £50,000 or more.
Although landlords are not compelled to apply the cap to tenancies that began before the deadline, they must adjust the deposit that exceeds the cap whenever an existing tenancy is renewed on a fixed-term basis.
Matt Trevett, managing director at the DPS, said: “Our figures show that the tenancy deposit cap will eventually affect a significant proportion of properties around the country.
“Landlords and letting agents should be ready to make the change whenever a relevant tenancy ends in order to fully comply with the law.
“Protecting a deposit with the DPS ensures both landlords and renters can have peace of mind during the course of a tenancy – and access to a free, impartial Dispute Resolution Service if they don’t agree when it ends.”
Since 1 June 2019, the proportion of deposits protected by the DPS that exceeded the cap decreased by 1.46% from 44.27%, which the DPS says reflects the start of new tenancies with compliant deposits and landlords choosing to adjust proactively larger deposits for existing tenancies.
The DPS said that if landlords want to reduce existing deposits now rather than wait until tenancies end, they can do so using its Deposit Cap Calculator, available at
http://www.depositprotection.com/media/1564/deposit_cap-calculator_2019.xlsx.