Only one in nine landlords believes the five-week deposit cap gives them adequate financial protection according to research by lettings agency LRG.
The five-week deposit cap, introduced under the Tenant Fees Act 2019, is not working for the majority of landlords.
Just 11.4% say it provides sufficient protection.
A further 33.5% say it covers most tenancies but not all, while 29.6% say it is not enough in any circumstances.
Some 13.9% say it falls particularly short where a pet is involved, and 11.6% say they are now relying more heavily on rent guarantee insurance as a result.
LRG says this paints a picture of a cap that commands little confidence, set against a market in which deposits have risen in value.
The Tenancy Deposit Service reports that 4.7 million deposits are now protected in England and Wales, with the average deposit rising to £1,175 – a figure that has climbed steadily alongside higher rents, yet remains capped at five weeks regardless of the property or the risk.
For tenants, the deposit remains a significant upfront burden at the point of moving.
In the LRG survey, some 44.1% say raising their last deposit was manageable but required planning.
Around 21.3% had to borrow money or delay other spending to cover it, and a further 11% said it nearly stopped them moving altogether.
Only 23.6% found it straightforward.
The agency says that one option that could ease that upfront pressure is deposit replacement products, where tenants pay a smaller non-refundable fee in place of a full cash deposit.
However, 25.7% of tenants were not aware the option existed.
Of those who were, 31% said they would possibly consider one depending on cost, 16.7% said they would actively prefer it, and 12.8% have already used one.
Allison Thompson, chief lettings officer, comments: “Deposits sit at the heart of the landlord-tenant relationship, and the data shows both sides have legitimate concerns that are not always being addressed. Landlords feel the five-week cap leaves them exposed, particularly where pets or higher-risk tenancies are involved.”
This article is taken from Landlord Today