Average rental deposits fall by 10.3% since ban

The average rental deposit paid by tenants in England has fallen by 10.3% since the ban on tenant fees was introduced in June 2019, new research by Hamilton Fraser’s deposit replacement scheme, Ome, has found.

Ome looked at the average cost of a rental deposit in the six months prior to the introduction of the fee ban and how it compared in the six months that followed.

The data revealed the average tenant in England was paying £1,098 for a rental deposit in the six months prior to the tenant fee ban, and that this has since dropped to £985 in the six months since.

Ome found the biggest decline has been in the South-West, where the average rental deposit being paid by tenants has fallen by 15.8% – down from £1,233 to £1,040.

The West Midlands saw the second-largest decline with a fall of 14.2%, while the research showed the East of England (-13.8%), North-West (-13.6%), South-East (-11%) and Yorkshire and the Humber (-10.4%) have also seen the cost reduced by double digits. Ome’s research showed the cost in London has declined by 7.9%.

The North-East was the only region to have seen an increase, with the average deposit paid rising by 5.3%.

Ome co-founder, Matthew Hooker, commented: “Many in the industry were fearful that the ban on tenant fees and a five-week rental cap where deposits are concerned would lead to a hike in rents for many tenants.

“However, it looks to have had the desired impact in many regions of the UK, with tenants now paying a good chunk less in order to secure their rental property. Of course, it may take some time before the true impact of such a major change surfaces and we could still see an increase in costs seep into the market.

“For the time being, however, the cost of a traditional deposit for the nation’s tenants is slightly more palatable and for those that are still unable to accumulate this upfront wealth, they have the choice of a deposit replacement such as Ome that allows them to pay small monthly fees instead of a large upfront deposit.”

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