The cheapest tenancy deposit rates in the market yet have been announced by a new scheme being launched by the Deposit Protection Service.
The new insurance-backed scheme will be in addition to the DPS’s custodial service, and will go head to head with the TDS and Mydeposits – the first launched by ARLA and the second by the National Landlords Association. Another contender, to be run by Capita, has yet to show its hand.
The new DPS scheme will charge no membership or annual renewal fees, meaning that the only paperwork will relate to pay-as-you go deposit protections.
Agents will be charged £9.50 plus VAT per deposit, with discounts available for volume. Landlords will be charged £15 including VAT for deposits under £500, and £22.50 for deposits over £500.
The charges all undercut existing costs. TDS charges agents either £13.25 or £10.25, depending on their level of discount. Mydeposits charges a £50-£100 per branch annual fee, plus between £10 (for SAFEagent members) and £35.
Landlords currently pay Mydeposits a £60 joining fee and between £17.50 and £30 per deposit. They pay the TDS £16.50 for deposits up to £500 and £24 for deposits over £500. The TDS DepositGuard scheme has a £75 annual fee and charges £15 or £22.50.
The DPS currently runs the only custodial based deposit protection scheme in England and Wales and is the first scheme to offer landlords and letting agents both custodial and insurance protection options. The new scheme launches on April 2, but it is possible to register in advance.
Landlords and agents will be able to register online as well as by phone, and manage both their custodial and insured deposits via one integrated online account. The new insured scheme is due to launch in April and landlords and letting agents are already registering in advance.
Kevin Firth, director of the DPS, said: “We’re delighted to announce the pricing for our insurance based deposit protection scheme and provide our customers with the best value for money deposit protection options.
“Our goal is to deliver excellent service to the industry, and offering the most cost-effective insured scheme alongside our custodial option will ensure that landlords and letting agents have the best choice of protection.”
The DPS custodial scheme currently protects over 970,000 deposits. The DPS was granted approval by the Government to run the insurance based deposit protection scheme in England and Wales last September.
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Comments
@Smartagent
Institutional security??? like the banks you mean? or the government gold reserves that we used to have? or the FSA? or our pension funds that we no longer exist?
You really think global institutions are exempt for financial problems? then you're as naive as your post suggests. And if you think the government 'licensing' of the DPS will protect you in the event anything untoward does happen to them, then you are very, very wrong.
If anything happens to us our CMP will kick in and ensure no one loses out; if anything happens to the DPS the agent will be carrying the can for the whole amount if you have advised your clients to use them.
That aside, we, like a lot of agents, landlords and tenants in the UK, are fed up with the constant delays and hoop jumping we are faced with when dealing with the DPS over straight forward disputes of even a few pounds.
Our tenants do feel safer knowing that we can release their deposit back to them when the tenancy is over rather than waiting for the DPS to shuffle all their paperwork around, especially if there is any dispute. They've just taken 7 weeks to return part of a tenants deposit to them even though we both agreed it 6 weeks ago. If they were an agent delaying the return of the deposit for that long, what would you think? On average we release deposits within 3-5 days under the TDS; usually double that with DPS before the tenant sees their money back IF there is no dispute.
We are affiliated to RICS, and longstanding members of ARLA, TPOS, and NALS. We are also members of Safeagent. Clearly a lot of people on this forum don't value those bodies but to us it means we are standing up to be seen, not lurking in the shadows. We pay for an independent audit of our client accounts every year, we have nothing to hide and our clients and landlords are at no risk whatsoever.
Mr Comer,
Curious why you should feel that switching from the only Government licensed custodial scheme, with all the institutional security that confers, (not to mention the size of their balance sheet) to an 'insured' scheme that was (allegedly) financially compromised only 18 months ago, would make your clients deposits 'Safer' - still I am sure you have your reasons? I am also sure that your clients tenants will be very happy to know that their funds reside safely in your bank account rather than that of a global institution.
Hopefully the income from this will give them the funding to put their house in order; we moved all of our DPS deposits over to the TDS to be safe, too many unexplained delays in getting the deposits back from the DPS over the last 6 months.
Great idea will they be any easier to deal with when a tenant clears off abroad leaving damage to the property and the DPS stop the legitimate works being carried out. The tenant is still due for some money back but despite having put it in writing the deposit can be released to the landlord/agent because it is not on the right bit of paper it comes to a grinding halt and leaves the landlord high and dry.
This was set up for tenants but sadly there is little there to help a landlord get recompense from a bad tenant.
There is no logical reason to use the TDS as the costs are so high. The current DPS scheme is free so why use another which costs??.... We switched from the TDS to DPS when they started their ridiculous charging some years ago.
Unless holding the clients' money has another purpose for you? Maybe you're reliant on the £3 approx. interest you earn each year?!!
What a lot of people seem to miss with the TDS is that the charge is an annual charge - if the tenancy lasts more than a year - you have to pay the fee again.
This makes it one of the most expensive schemes - aside from the rediculous loading of costs if they are asked to do some work for the membership fee and actually adjudicate !