The new regulations mean that landlords must return cash to tenants if the deposit for a renewing tenancy exceeds five weeks’ rents.
The tenant fees ban and its restrictions on rental deposit size are beginning to bite with landlord refunds running from 1p to several thousand pounds, it has been revealed.
This includes one landlord who this week voluntarily paid £4,880 back to a tenant on their refundable property deposit thanks to the new legislation.
The lucky renter – who admittedly had paid a proportionately large deposit – was handed the bumper refund recently.
Since the Tenant Fees Act was introduced last June, landlords in England are paying back an average deposit of £317 to tenants renewing contracts with them, although one landlord has even paid back just one penny.
The legislation states that a refundable tenancy deposit must be capped at no more than five weeks’ rent where the total annual rent is less than £50,000, or six weeks’ rent for rent £50,000 or above.
It also says that any existing deposit above the cap should be refunded on a new fixed-term tenancy which is created on, or after, 1 June 2019.
Deposits have typically fallen from 5.5 weeks rent in April to 4.76 weeks in December, according to TDS. This is helping renters across England make an average saving of £163 and £300 in London.
Steve Harriott, its chief executive, says: “Handing over a penny to a tenant might seem a bit pointless, but we’re pleased to see that landlords are adhering to the new legislation, no matter how small the refund is.
“The legislation now means tenants can easily see what any given property will cost them with no hidden costs.” Find out more about how the deposit cap works.