The latest research by Hamilton Fraser’s deposit replacement scheme Ome has found that the average rental deposit being paid by tenants in England has fallen -10.3% since the ban on tenant fees was introduced in June 2019.
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 following.
The data shows that the average tenant in England was paying £1,098 for a rental deposit in the six months prior to the tenant fee ban. This has since dropped to £985 in the six months since.
The biggest decline has been in the South West, where the average rental deposit being paid by tenants has fallen -15.8%. Down from £1,233 to £1,040.
The West Midlands has seen the second-largest decline, down -14.2%, while 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.
The North East is the only region to have seen an increase, with the average deposit paid up 5.3%, while in London, the cost has declined by -7.9%, down -9.7% in the East Midlands.
Co-founder of Ome, 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.”