A campaigning letting agent says that at the start of this financial year the total cash value of deposits held in deposit protection schemes was £4,107,045,898.
Previous figures showed only £3.2 billion held in deposits.
Figures obtained from the Department of Communities and Local Government by no-deposit renting firm Dlighted and its owner Ajay Jagota show that 14,011,116 deposits are protected in a deposit protection service licensed by DCLG.
The figures also show there is a deposit dispute in just 1.5 per cent of tenancies, meaning - Jagota says - deposits are unnecessary on 98.5 per cent of occasions.
Estimates by Dlighted – calculated by multiplying the number of privately rented households by the average cost of a standard deposit of four weeks rent – show that close to £2 billion is currently being used for deposits on rented homes in London alone, while a further £54m is being used on rental deposits Birmingham, £49m in Liverpool and £47m in Manchester.
“I don’t know how anyone could see £4.1 billion being lost to the British economy by something which is unnecessary 98.5 per cent of the time and believe that the way we rent homes in the UK is not in need of reform” says the agent.
“Deposits raise the cost of renting, helping to put home ownership out of reach for many renters but they don’t provide landlords with meaningful protection against unpaid rent or property damage.
“With the government planning to cap deposits at four-weeks rent, landlords will soon only be covered in the event of a single month of unpaid arrears, at a time when Universal Credit has seen some rent arrears quintupling. And that’s before you consider property damage or legal costs.”