Issues around demands for excessive deposits have always been a feature of the rental system, however these problems exacerbated greatly as the housing crisis began to worsen and the supply of properties began to reduce. We started to see, via our services, tenants who were asked to pay two, or more, months’ rent as a security deposit. Reform of the deposit system has been a longstanding priority for Threshold including the limiting of the amount of deposit a tenant can be asked to pay.
In summer 2021, following repeated calls from Threshold and others, the government introduced legislation to address this issue. The changes to the law mean that for tenancies that began after 9th August 2021, a landlord cannot require more than the equivalent one month’s rent as a deposit. A landlord may also require a month’s rent in advance, so the maximum that a tenant can be asked to pay upfront to secure a property is the equivalent of two months rent.