Tenancy deposit cap rules: England

What do you need to know?

The tenant fee ban has been with us since 1 June 2019, but following the twelve month transition period, where some fees were still allowed, there are now no fees permitted EXCEPT the 11 which are specifically permitted in the Tenant Fees Act 2019 (The Act). Find out more in our Tenant Fees Act FAQ.

What does this mean for the deposit cap?

The rules on the deposit cap have not changed. Any tenancy which was signed on, or after 1 June 2019, has to fall in line with the deposit cap rules laid down in the Tenant Fees Act 2019.

The deposit amount you can take from prospective tenants, on most residential tenancy deposits, will depend on the annual rent being charged, as follows:

  • Where the annual rent is up to £50,000, a maximum of five weeks’ rent
  • Where the annual rent is over £50,000 and under £100,000, a maximum of six weeks’ rent

This applies to assured shorthold tenancies, tenancies of student accommodation and licences to occupy housing in the private rented sector in England.

How does the cap work after 1 June 2020?

Tenancy statusRefund any excess
You must comply with the 5 or 6 week deposit capTenancy renews New fixed termYes
You are not limited by the 5 or 6 week depositStatutory/contractual periodic – started pre 1 June 2019No

Calculating the deposit

Step 1 – Monthly rent x 12 = annual rent

Step 2 – Annual rent ÷ 52 = weekly rent

Step 3 – Weekly rent x 5 or 6 = maximum deposit

Our deposit calculator is available on our website. It is free to use and will help you work out the maximum deposit amount you can take. We recommend all of our members use this tool to help with the calculations and make sure you protect the right amount.

To help you make sure the deposit is not too high, we have added an additional step to our back office systems. This will validate the amount of deposit which needs to be protected and make sure it is in line with the legislation, by using the annual rent that you provide when protecting the deposit.

Your step by step guide to complying with the five/six week deposit cap

If you have taken a deposit and protected it, with either our Insurance or Custodial Scheme, or if you are due to take a deposit in the future this is what you need to do…

New deposits

Custodial & Insurance schemes

Step 1 – Landlord/agents must only take a deposit in line with the five/six-week rent cap

Step 2 – Protect the deposit within 30 days of receiving it, as normal

Step 3 – Give the tenant the prescribed information as well as the ‘Information for Tenants’ leaflet.

You can find copies of the Deposit Protection Certificate and the leaflet online in the members’ area.

Renewing a fixed term tenancy

Insurance scheme

Step 1 – You will need to return any deposit amount in excess of the five/six week cap to the tenant

Step 2 – As normal, where there is a renewed fixed term, you will be required to pay for a new deposit protection using the renewal option available to you on your online account.

Note: Using the renewal function will mean that the original protection certificate will become unprotected when the fixed term expires.

Custodial scheme

Where you need to return any deposit amount in excess of the five/six week cap to the tenant, we recommend you log in to your account, click on ‘my protections’ and follow the instructions to download a template which will ask you for the necessary information.

Once completed please send it to us by email at depositcap@mydeposits.co.uk.

We will make arrangements to contact the tenant on your behalf and return the balance of the deposit to them.

Currently our system will not allow you to release excess deposit amounts automatically.

Note: You will have complied with the law, once you have correctly notified us of your request to release the excess amount.

Where the tenancy becomes ‘periodic’

The rules on periodic tenancies, which applied during the transition, now need to be updated. The following applies to both insurance and custodial deposits.

Where a tenancy started before 1 June 2019 and:

Scenario 1: Rolled into a statutory periodic tenancy during the transition period, you are NOT required to refund any deposit amount in excess of the five/six week cap. The deposit remains unchanged until it is renewed, or ends.

Scenario 2: Rolled into a statutory periodic tenancy after 1 June 2020, then the deposit cap DOES apply and any excess deposit MUST be refunded.

Insurance scheme

Step 1 – Where scenario 2 (above) applies, you will need to return any excess deposit amount and inform the scheme of the new deposit amount by email at depositcap@mydeposits.co.uk

Step 2 – In scenarios 1 and 2 (above), you MUST inform us that the original fixed term rolled into a periodic tenancy, which you can do online by logging into your account and updating the status. A new protection will NOT be required if the fixed term continues as a periodic tenancy.

Note: As you are holding the deposit, it is up to you to make sure you are complying with the law. We suggest you keep proof of any attempts to return the excess deposit, and ask for confirmation when it’s been received.

Custodial scheme

Step 1 – Where scenario 1 (above) applies, you are NOT required to refund any excess deposit amount or inform mydeposits.

Step 2 – Where scenario 2 (above) applies we recommend you log in to your account, click on ‘my protections’ and follow the instructions to download a template which will ask you for the necessary information.

Step 3 – Once completed please send it to us by email at depositcap@mydeposits.co.uk

We will make arrangements to contact the tenant on your behalf and return the balance of the deposit to them.

Note: Once you have correctly made your request to release the excess amount, your responsibility under the Act is satisfied.

 

Points to note

As long as the property address, the landlord and tenant remain the same, you do not need to serve the prescribed information to the tenant again. However, it is best practice to provide the tenant with the Deposit Protection Certificate confirming the new deposit amount.