What is the acceptable deposit for tenants in London?

Buying property is expensive and there is a considerable amount of focus on the initial costs of buying a house. Many prospective first-time buyers have been boosted by the removal of stamp duty costs when the property costs less than £300,000 but of course, this is not too helpful for buyers in London. The cost of deposit is a major factor to consider when buying property but thankfully there is a growing range of support systems for people looking to buy property. However, there is growing discontent about the initial costs of renting, and London tenants have a lot to consider.

The size of deposit associated with renting property is a major cost for many tenants and it is important that this amount falls within your budget. With an upfront rent payment, removal costs and fees, new tenants must pay a lot of money, and this topic has been discussed by MPs of late. The Housing, Communities and Local Government Committee has stated that the deposit should be limited to five weeks' worth of rent, but landlord groups have suggested that a six-week group would be preferable for landlords.

How much could you pay as a deposit in London?

According to information provided by the home.co.uk website, the average rent in London stands at £2,945 per calendar month, which equates to £736.25 per week. The various level of deposit cap for the London average would be as follows:

•    For a four-week cap, the average deposit would be £2,945
•    For a five-week cap, the average deposit would be £3,681.25
•    For a six-week cap, the average deposit would be £4,417.50
•    For a seven-week cap, the average deposit would be £5,153.75

Tenants need to know what they are likely to pay as a deposit

As is the case with all property or rental issues in the capital, the price involved can get expensive very quickly. Even if you argue that the average rent in London doesn't apply to many parts of the capital, the cost of renting in London can still be prohibitive. Consider Bow, with the home.co.uk site listing the average rent per calendar month as £1,536, which equates to £384 per week. The following table shows how much a tenant in Bow would have to pay for the capped limits:

•    In a five-week cap, the average deposit would be £1,920
•    In a six-week cap, the average deposit would be £2,304
•    In a seven-week cap, the average deposit would be £2,688

There is no denying that the topic of deposit caps is of interest to many people and there are many valid points about what limit should be set. At Unico Property Group, we aim to provide support and guidance to tenants and landlords. We are extremely pleased to say that we have helped a broad range of clients in these sectors and no matter what assistance you need in the London rental market, we are here to help. Whether you are a landlord or tenant, contact Unico Property Group and we will do our best to help you make your next move.