The Deposit Protection Service (DPS) has revealed that more than four out of 10 of the tenancy deposits it manages are currently higher than the new tenancy deposit cap.
Since the beginning of June, 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.
According to the DPS, 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.
Outlined in reports, the DPS has revealed that 42.81% of the deposits they currently protect stand above the cap.
Since the cap’s implementation, the proportion of deposits protected by the DPS that exceeded the cap decreased by 1.46% from 44.27%, said to reflect the start of new tenancies with compliant deposits and landlords “choosing to adjust” proactively larger deposits for existing tenancies.
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 to fully comply with the law.
“Protecting a deposit with the DPS ensures both landlords and renters can have peace of mind during a tenancy and access to a free, impartial Dispute Resolution Service if they don’t agree when it ends.”