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.
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.
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:
Max Holding Deposit:
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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 ofonly £49!
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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.
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!