You are here: Home - News -

London Mayor accuses government of ‘bottling it’ on rental caps

  • 02/11/2017
  • 0
London Mayor accuses government of ‘bottling it’ on rental caps
The Mayor of London, Sadiq Khan, has today accused the government of ‘bottling it’ on pledges to cap rental deposits for tenants.

In the Queen’s Speech earlier this year, the government said it would cap deposits at one month’s rent to help tenants with up-front costs.

Along with Citizens Advice, Shelter and Crisis, Khan had lobbied government to cap deposits at three weeks’ rent. However, ministers have listened to letting and estate agent calls for a six-week cap.

Khan said this is no different from what is already often the standard amount in the capital and will see renters face up-front costs of about £2,000. That’s double the £1,000 deposit cap proposed by the mayor, and £500 more than the government originally planned.

Khan also proposed a cap on ‘holding deposits’ – charges that cover the cost of references or losses in rent if a new tenant needs to be found. He proposed this be set at one day’s rent, around £50.

However, the government now says a holding deposit will be capped at a week’s rent, which would work out in London at around £340.

Khan has also criticised the government for not taking the opportunity to bring financial penalties for letting agents into line with those currently in place for landlords.

He argued they should be put on par with the £30,000 fines councils can use to punish rogue landlords for breaching housing legislation.

Instead the government has set the initial fine for breaking the law at £5,000.

Khan, said: “This government once again has proved it is all talk and no action when it comes to making it more affordable for those struggling to rent or buy a home.

“Ministers have bottled it on their commitment to reduce up-front deposits, which we know hit thousands of low-income Londoners the hardest.

“While I welcome the fact lettings agent fees paid by tenants look set to be finally banned – the caps on deposits and holding deposits are almost meaningless and will do nothing to make renting more affordable for Londoners.

“Instead the government should cap deposits at three weeks’ rent, raise the penalty for charging illegal fees to £30,000 or a criminal prosecution, and give local authorities extra funding to enforce these new penalties.”

There are 0 Comment(s)

Comments are closed.

You may also be interested in

Business Skills

In this section, we offer short ‘how to’ guides on harder to crack areas of business. From social media, to regulation or niche product areas, we cover it all.


Our journalists interview key industry entrepreneurs, strategists and commentators for day-to-day market insight and a strategic view of where the industry is heading. We offer lessons for success and explore the opportunities for your business

Success in Practice

Here, we share case studies fleshing out best practice to help you decide what could work for your business. Take a look at how others approached complex tasks like launching a new mortgage lender, advising on a new product area or deciding to specialise in another. Learn from others mistakes and triumphs.


Each week, we ask top mortgage and property commentators with a unique perspective to examine a key news headline, market move or regulatory or political issue.


Vote in our weekly poll here. It’s your chance to tell us what you think and be heard on the top news stories of the week. Review our archive to find out what your industry really thinks and all our coverage of the results.

Top Comments

Be part of the conversation on Mortgage Solutions. We want to hear from you. We have a tool called Disqus to tell us which stories get the most comments each week. Every Friday, the team picks the most thoughtful or opinionated contributions from our readers to enjoy again. Don’t forget to share your favourite stories from the site on social media to keep the conversation going.

Read previous post:
Mark Carney Bank of England governor
Bank of England ups Base Rate by 0.25% to 0.5%

In a highly-anticipated interest rate decision today, the Monetary Policy Committee (MPC) voted seven to two to make the first...