It’s literally a billion-pound scandal. The government must take action on tenancy deposits.
1,500,000 renters could be at risk of losing their deposits after research revealed a third believe their bond has never been placed in a deposit protection scheme.
A new survey suggests renters in 33% of the UK’s 4.5m rented homes think that their landlord has not placed their money into a compulsory deposit protection scheme (DPS).
This equates to in the region of £1,200,000,000 of deposits which could be unprotected.
An additional 35% of renters do not know the whereabouts of their deposit – even though landlords and letting agents are legally obliged to inform tenants which of the three government-backed deposit protection schemes their deposit has been secured with.
The research – carried out by price comparison website Comparethemarket.com – suggests almost one third (30%) of tenants need to chase their landlord to get maintenance and repair work carried out, with almost one in ten (9%) tenants claiming it has taken up to a month for issues at their properties to be fixed.
I head the #ditchthedeposit campaign, which is calling on the government to replace traditional tenancy deposits with deposit-free renting, allowing the UK’s £4.5bn of tenancy deposits to be invested in housing.
Our research has revealed that crooked landlords and letting agents are convicted to thieving more than £1m of deposits every year, but we’ve always said that we feared the true figure could be hundreds of times higher – and this survey backs up our belief.
What’s also scandalous is the sheer number of renters who seem to be waiting weeks for repair work to be carried out. Imagine waiting a month for the boiler to be fixed at this time of year, especially with a young family.
Deposit free renting doesn’t just make it easier to find and keep good tenants while protecting landlords better, and at the same time making it cheaper to rent – by delegating damage claims to an independent insurer it guarantees that if repair work is needed, it gets done.
I am founder and Managing Director of deposit-free renting firm Dlighted. Dlighted uses low cost insurance to protect landlords against hundreds of thousands of pounds of property damage, unpaid rent and legal costs, while allowing them to find tenants faster by allowing customers to rent with zero deposit.
My deposit theft totalsier shows almost £1,000,000 of renter’s cash stolen by crooked agents already in 2018 as deposit theft figures continue to soar
Average North East house prices £5000 down in cash terms over the last four weeks.
The collapse of yet another letting agent business has left landlords and tenants owed thousands of pounds in deposits which seem to have never been place in deposit protection schemes.
The forthcoming deposit cap – maximum amount landlords are allowed to take in tenancy deposits – could be fixed at just three weeks’ rent under new plans announced by the Labour Party. But they don’t have to win an election for it to happen!
North East house prices fell 1.8% in April, slashing more than £3000 from price of average home.
Trade body figures suggest that the number of complaints being made against letting agents is continuing to rocket – rising 35% in the last 12 months.
Almost half of landlords have had tenants in rent arrears and a quarter have been left with huge repair bills at the end of tenancies – with one landlord left £16,000 out of pocket.
It looks like even more renting reform could be on the cards after the government announced a study into the benefits of deposit free renting alongside the final draft of the Tenant Fees Bill – to be published within 6 months.
The government’s response to recommendations made in the Housing Communities and Local Government Select Committee’s examination of the draft Tenants Fees Bill, published alongside the final draft of the bill published last week, states:
“We have noted the Committee’s suggestion that Government should encourage innovation in the deposit free renting sector by assessing the merits of alternatives to traditional security deposits and reporting their findings to the Committee. Government will explore the merits of deposit alternatives and reply to the Committee within six months”
As founder of deposit free renting firm Dlighted and head of the #ditchthedeposit campaign, which encourages the government to promote alternatives to traditional tenancy deposits which allow renters to save for properties of their own, I welcome this announcement
An Impact Assessment of the forthcoming Tenant Fee Bill gives an insight into the government’s current thinking, stating:
The deposit establishment was practically cracking open the champagne last week when the final draft of the Tenant Fees Bill left a system they profit from enormously at the expense of landlords and tenants largely intact, but this announcement shows more reform could be on the cards – and could be with us within months.
The government’s thinking is clear – they’re coming around to the view that deposits are ‘unreasonable’ ‘excessive’ and make entering and moving within the private rented sector ‘financially prohibitive’. They don’t meaningfully ‘mitigate real financial risk’ and the money could be ‘better used in the wider economy’ – and I couldn’t have put it better myself.
We’re talking about a system which sucks £4.2bn from our economy, makes renting unaffordable and costs landlords tenants without adequately protecting them against rent arrears and property damage. Intervention is needed to address these market failures, and it could be here by the end of the year.
Even if this study doesn’t lead to new legislation the final Tenant Fees Bill still contains the provision for the Housing Minister to move the 6-week deposit cap whenever they feel like it – and there’s no reason to think that cap couldn’t be set at zero”.
Dlighted allows landlords, letting agents and tenants to let properties with zero deposit, using low cost deposit replacement insurance to protect property investors against damage, legal fees and unpaid rent.
#ditchthedeposit argues the government should support first time buyers to get a foot on the property ladder by transferring their rental deposits into Help to Buy savings schemes and by encourage the uptake of deposit free renting in the private rented sector.
New research suggests cost is the most important factor for renters when it comes to choosing a property – disproving the old theory of location, location, location.
North East house prices rose 3.2% in April, making them worth £7000 more than this time last year
North East renters face fees of at least £867 – rising to £1400 in Newcastle, £1230 in Durham City and £1131 in Morpeth – as the average North East tenancy deposit passes £850
Academic research suggests tenants in England and Wales are missing out on £80m of interest to tenancy deposit schemes every single year.
Edinburgh and Brighton are the most expensive places in the UK outside of London when it comes to moving house – with lanlords and letting agents limiting customers to people with £2500 to hand for a tenancy deposit!
Change after change in private rented sector red tape, but tenancy deposit theft isn’t getting any better – it’s getting worse!
Government figures suggest 175,000 privately rented properties may have been empty for at least six months of the last year, laying bare the full cost of owning an empty buy-to-let property.
Average North East house prices were 0.7% up in January – adding over £1200 to the value of the average home – with values on the rise in 80% of the North East.
The New Year has already seens several new pieces of lettings legislation brought before Parliament – and some of it could hit landlords in the pocket.
New research suggests that almost a million millennials have been priced out of even renting a property – with the cost of tenancy deposits and a poor credit score to blame.
• Darlington and Durham named the North East’s 2017 Property Hotspots
Crooked landlords and letting agents have raided close to £1,000,000 of tenancy deposits in 2017 – the lastest installment of my stolen deposit totaliser shows.
• Monthly growth of 0.6% not enough to keep average house prices above levels recorded in November 2016.