Maximum Tenancy Deposit: How to Calculate Five Weeks’ Rent under the New Rules

From 1st June, landlords will only be able to take five weeks’ rent as a tenancy deposit. This increases to six weeks for properties whose rent exceeds £50,000 per year.

There are new rules for holding deposits, too. Landlords will be able to take a maximum of one week’s rent as a holding deposit. These changes also begin on 1st June.

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Tenancy Deposit Calculator

We have developed a calculator to quickly tell you the maximum tenancy deposit you can collect after the Tenant Fees Act commences on 1st June 2019.

Simply enter your monthly rental amount for the property to let, and we will instantly show you the maximum amount of money you can take as a security deposit.

We automatically adjust the settings if your annual rent goes over £50,000, changing the cap to 6 weeks’ rent, in accordance with the new rules. The tool also shows you the maximum holding deposit, which is equal to one week’s rent.

Deposit Calculator

Enter your property’s monthly rental price. The calculator will show the maximum tenancy deposit that can be placed for the tenancy. Check out Rent Now to have all your landlord obligations handled automatically!


Enter Monthly Rent

£

Max Tenancy Deposit:

£0

Max Holding Deposit:

£0

Let OpenRent Do it All for You!

With Rent Now, OpenRent can collect the deposit, register it, serve the prescribed information, collect the contract signatures and collect the rent, all for a one-off payment of only £49!

Let us handle all your landlord responsibilities. Try Rent Now.

New Tenancy Deposit Rules

The new rules are due to the Tenant Fees Act, which limits the amount of deposit a landlord can take to five weeks of rent. The unusual number of weeks seems to have been a compromise struck in the House of Lords between four weeks and six weeks.

The new holding deposit cap of one week's rent will be much less than some landlords are used to collecting. But we still think that landlords will be adequately protected.

For example, a property that lets at £1,500 per month will have a maximum holding deposit of £346, which is a considerable sum for a tenant to forfeit. We see very few holding deposit forfeits with sums near half this size.

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How Much Is Five Weeks' Rent?

To find 5 weeks' rent, you need to:

  • Multiply your monthly rent by 12 to get the annual rent
  • Divide the annual rent by 52 to get the weekly rent
  • Multiply the weekly rent by 5 to get 5 weeks' worth of rent

Or for a shortcut, just multiply your monthly rent by 1.15385!

Or even easier, just enter your monthly rent in the calculator above.

Do I Need to Register the Deposit Differently after 1st June?

No. You will need to register the deposit exactly as before. You will need to protect the deposit in an accredited deposit protection scheme and serve the tenants the prescribed information within 30 days of receiving the money.

If you do not register the deposit properly, there can be big consequences: from not being able to serve an eviction notice, to being fined up to three times the total deposit value!

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Notable Replies

  1. Clive says:

    If you want to “round off” you must round down and not up. If you round up you will be breaking the law as you are charging more than 5 weeks rent (even if it is by 1p).

  2. Sam says:

    Really good point, Clive!

  3. Shaun says:

    That would be great - anything to help would be appreciated! I don’t want to run afoul of the law without even knowing it!

  4. PS I’m feeling very frustrated and fed up, there is no clear guidence here, no guidence on the DPS app only how to refund the full deposit, and they have not replied to my enquiry.

    Do I make a full refund but deduct the new amount as the security deposit. Would a deduction be kept as a deposit by DPS and would it be protected, or paid to me? Or do I need to make a full refund and then ask the tenants to pay the reduced security deposit amount? What protection is there for landlords if the tenant refuses to pay the new deposit? If they pay the deposit is it to me or Open Rent or directly to DPS? Would the new deposit to DPS be protected? What is the process? Thanks Lorraine

Continue the discussion at community.openrent.co.uk

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