Deposit Cap (5 Weeks)
Summary
Before June 2019, landlords could demand whatever deposit they chose — six weeks, eight weeks, or more. The Tenant Fees Act 2019 ended that. For tenancies with an annual rent below £50,000, the maximum deposit is now five weeks' rent. For annual rents of £50,000 or above, the cap is six weeks' rent. A deposit above the cap is a 'prohibited payment' under the Act. The tenant is entitled to a refund of the excess, and the landlord may face a Trading Standards penalty of up to £5,000 for a first breach. Furthermore, taking a prohibited payment can invalidate a Section 21 notice.
How the 5-week cap is calculated
Five weeks' rent is calculated as: (monthly rent × 12) ÷ 52 × 5. For example, a monthly rent of £1,200 gives an annual rent of £14,400. Dividing by 52 gives a weekly rent of approximately £276.92. Multiplied by 5 gives a maximum deposit of £1,384.62 (rounded). Any deposit above this amount is a prohibited payment under the Tenant Fees Act 2019 and must be refunded. The calculation is the same regardless of whether the tenancy is fixed-term or periodic.
What is a prohibited payment under the Tenant Fees Act 2019?
The Tenant Fees Act 2019 came into force on 1 June 2019 for new tenancies and 1 June 2020 for all existing tenancies. A 'prohibited payment' includes any payment not listed in Schedule 1 of the Act. The maximum deposit is listed as a permitted payment, but only up to the statutory cap. Any excess above the cap is prohibited. Other common prohibited payments include administration fees, reference fees, and renewal fees — all of which were common before June 2019 but are now unlawful.
Prohibited payments and Section 21 invalidity
Under the Tenant Fees Act 2019 s.17, a landlord who has taken a prohibited payment cannot serve a valid Section 21 notice until the prohibited payment has been repaid to the tenant. If your landlord took a deposit above the cap and has not refunded the excess, any s.21 notice they serve is invalid. Check the deposit amount against the 5-week calculation before responding to any s.21.
Checking whether your deposit exceeds the cap
- ✓Calculate your weekly rent: monthly rent × 12 ÷ 52.
- ✓Multiply by 5 (or 6 if annual rent is £50,000+) to get the maximum permitted deposit.
- ✓Compare with the deposit you actually paid.
- ✓If the deposit exceeds the cap, write to the landlord requesting a refund of the excess.
- ✓If the landlord refuses, contact Trading Standards and consider county court proceedings for the excess.
Enforcement of the deposit cap
Local Trading Standards authorities are responsible for enforcing the Tenant Fees Act 2019. A first breach attracts a civil penalty of up to £5,000. A second breach within 5 years is a criminal offence. Tenants who have paid a prohibited payment can apply to the First-tier Tribunal (Property Chamber) for a recovery order — a faster and cheaper route than county court for recovering prohibited payments. The First-tier Tribunal can order repayment of any prohibited amount within the preceding 12 months.
Sources
- Tenant Fees Act 2019, s.3 and Schedule 1, para 4
- Tenant Fees Act 2019, s.17
Frequently Asked Questions
- Does the 5-week cap apply to deposits paid before June 2019?
- From 1 June 2020, the cap applied to all tenancies, including those that started before June 2019. If your tenancy is still ongoing and the deposit you paid before June 2020 exceeds the cap calculated at your current rent level, the excess is now a prohibited payment and should be refunded.
- Can a landlord ask for a larger deposit if I have a pet?
- No — the 5-week cap applies regardless of pet ownership. The Tenant Fees Act 2019 does not create a pet exception. Some landlords now charge a higher monthly rent for pet tenancies to compensate — that is lawful, but a larger deposit is not.
- Is a holding deposit subject to the 5-week cap?
- No — holding deposits are governed separately. Under the Tenant Fees Act 2019, a holding deposit is capped at one week's rent. It is distinct from the tenancy deposit; different rules apply to how and when it must be refunded.
Related
- Holding Deposit
- Assured Shorthold Tenancy (AST)
- Section 21 Notice
- housing-act-2004-s-213
- deposit-return-deadline
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