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Are UK rental deposits too high? Not by international standards…
The typical UK private rental deposit, often considered high in this country, is thought to be relatively low by international standards according to a new study.
Deposit replacement scheme Ome has looked at comparative deposits from 15 nations.
In England and Wales a tenant currently pays an average of £1,139, although across the UK as a whole (so including Scotland and Northern Ireland) this reduces to £811.
The tenant fees ban means that agents and landlords can now only charge five weeks’ rent as a deposit in most circumstances.
Ome says that while this might still seem high, there are tenants around the globe with a much larger financial obstacle.
For example in Japan, where 38 per cent of the population rent, tenants pay 10 months rent as a deposit, meaning an upfront cost of £6,145.
In Denmark deposits are based on three months’ rent, with a further three months paid upfront, so requiring £4,432.
Like Japan, South Korea also requires tenants to pay 10 months’ rent as a deposit, costing £4,360 on average.
US tenants face paying as much as three and a half months’ rent upfront £3,547, with some states allowing agents and landlords to charge what they want with no statutory limit on deposit size.
Swiss tenants are required to pay as much as three months’ rent to secure a rental property, coming in at an average cost of £3,542.
The full list is as follows:
Japan, 10 months’ rent: £6,145;
Denmark, three months’ rent and three month deposit: £4,432;
South Korea, 10 months’ rent: £4,360;
United States, up to 3.5 months’ rent: £3,547;
Switzerland, up to three months’ rent: £3,524
Germany, three months’ rent: £1,860;
Austria, three months’ rent: £1,839;
Israel, two months’ rent: £1,598;
Canada, two months’ rent: £1,488;
Australia, six weeks’ rent: £1,269;
France, two months’ rent: £1,146;
UK, five weeks’ rent: £811;
New Zealand, up to four weeks’ rent: £743;
Turkey, up to three months’ rent: £527;
Sweden, usually no deposit, £0.
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Original Source: Letting Agent Today.
Original Author: Graham Norwood.
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