Tenant Fees Bill

Written evidence submitted by John Socha, Socha Estates (TFB51)

Dear Sir/Madam

I am a landlord who has been in the business for 22 years.

We have an estate of 25 houses and apartments.

We are currently building to rent, 3 of the 25 have been built by us to increase our rental portfolio and our town's stock of homes.

My understanding is that some MPs are attempting to reduce the proposed deposit to 3 weeks.

A deposit is a bond to ensure that when the property is returned it is more or less in the same condition as it was at the commencement of the tenancy, with allowance for fair wear and tear over the duration of the tenancy.

It is also set to ensure that the tenant pays the last month of rent and some funds to pay for repairs.

Three weeks would not even ensure that the last month was paid in full. This will lead to a rise in the number of small claims in the County Court.

As claims can be made on line, this will give The County Court even more work to do.

Setting the deposit at 6 weeks ensures that the tenant returns the property clean and tidy. Making it easy for the landlord to re-let the property more quickly.

If the tenant has no "skin in the game" they will leave the property untidy.

The process of hiring a cleaner and undertaking repairs will add to the shortage of properties. Time will be lost as I will have to engage our contractors to undertake the works. Shortening the supply of rental properties and increasing rents.

This is a business of "unforeseen consequences".

Few of those that are owner occupiers understand how the rental market it works, as this is a "people business".

Attempting to lower the amount of deposit is seen as "populist".

True there are over 4 million tenants.

According to the Office of National Statistics, there are 2.1 million landlords. Landlords tend to vote.

Six weeks rent has become the standard for deposits.

Reducing it will simply lead to more small claims and higher rents to protect the landlord's investment.

This alteration has failure written all over it.

Over the last three years, 2015, 2016 & 2017 we have returned 18 deposits.

14 were returned in full - 78%

2 were returned less stoppage for cleaning, paid for by choice of the tenants - 11%

2 were withheld in full. 1 absconded and 1 died in the apartment and was a chain smoker - 11%

Six weeks rent as deposit is a sensible compromise.

June 2018

 

Prepared 13th June 2018