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Deposits: government urged to look at reform or alternatives

Just under a third of people moving from one privately rented property to another in the past two years had to pay a new deposit before their old one was returned, according to a research exercise by consumer group Which?

The group describes this as evidence of “the broken deposit system.”

It says 43 per cent of private renters have to use a credit card, loan or overdraft, or borrow money from family and friends, to cover the cost of moving into a property. 


Which? says a key element of the cost is the security deposit, sometimes coupled with a long wait to have a previous deposit returned. 

Among tenants who had moved out of a rented property in the past two years, one in six who did get their deposit back said it took more than four weeks to arrive. 

Some 55 per cent of tenants who didn’t get their old deposit back in full challenged the decision. 

Which? says the most common reasons for a deduction was cleaning (50 per cent) and damage to property (32 per cent). 

The group also claims that one in 10 respondents to its survey claimed not to have been told the reason for a deposit not being returned in full. 

The results also highlight what the group calls “a lack of clarity about what your deposit money can be used for.” 

It says 62 per cent of landlords it questioned incorrectly believed the deposit could be used to pay outstanding utility bills, and Which? says both tenants and landlords need clearer guidance on the circumstances in which reasonable deductions can be made. 

“We believe the government must review deposit adjudication schemes to ensure they are working in the best interests of tenants. It must also provide an effective way for renters to escalate complaints made to their deposit adjudication schemes with the deposit adjudication service, if complaints haven’t been adequately resolved in-house” says the group. 

“[Government] should review the current, cash-based deposit system, and consider possible alternatives to avoid tenants having to cover two deposits at once when moving between properties. These alternatives include new, insurance-style options or the direct transfer of deposits between properties.”

Alex Neill, the managing director of Which? home products and services, says: “The number of people going into debt to cover the cost of a new deposit is concerning, particularly when you consider that many are forced to wait a significant time to get their previous one back, and could then face deductions that they don’t think are reasonable. 

“The findings highlight that the deposit system is crying out for reform to make it fit for purpose for the record numbers of people who are living in rented accommodation. We believe that the government must tackle the issues that we have identified in our report head on to ensure that the rental market delivers for consumers.”

  • James B

    Which have certainly jumped into the landlord bashing wagon, for self gain like many others
    The deposit system is not broken and is already heavily tenant favoured, they are scraping the barrel with this one

  • icon

    Agree.tenants get there deposit back within 10 days if there are No disputes. A landlord gives a tenant an Inventory on Move In. The tenant signs for the Inventory and makes no comments about it, their choice. On Move Out the place does not resemble the Move In as shown by the Inventory and the 3 monthly Inspections carried out over say a 2 year period. The landlord asks for his months rent because the tenant did not give notice, he asks for the cost of fumigation because the tenant left the property flea infested. The landlord asks for retreat and paint of walls and ceiling because the tenant allowed mould and damp to spread over a last 3 month period due to no ventilation and water leak not reported from Flat above. Now the tenant disputes all of this even though independent witnesses have fleas on their legs, damp and mould witnessed on ceiling and walls and cig butts and stains on carpet and ripped vinal, he refuses to give forwarding address and to confirm all utility companies have been notified but tells the council he moved out earlier than when he left keys with am agent even though it was a tenant find. Now as a landlord we have to fund the £1400 shortfall due to costs and on top of the mortgage repayment.
    Now Which needs to start reporting situations like this and then they will understand why a tenant might not get the deposit refunded in full or part or not at all. Even wirh All tbese proven Facts the deposit arbitrator will still side with the tenant!!

  • jeremy clarke

    There is no reason why deposits cannot be promptly returned, the only time issues arise generally is when tenants have not complied with tenancy such as non payment of rent or poor cleaning. In those instances deposit would not be returned under any scheme until arbitration. Passport of deposit would encounter same issues, tenants just need to understand that if they comply and follow the rules the period of "double deposit " need only be a matter of days.

  • Peter Hendry

    There are issues needing to be resolved fairly on both sides.
    It's no good siding with the tenant when in fact it's the landlord (who financed and provided the property in the first place) who needs protection from abuse by wayward tenants.

  • icon

    Everyone has the Deposit Scheme Leaflet depending on which scheme they use, everyone has a tenancy agreement in which it explains how a deposit can be used. If tenants hand back a clean property with no damage, then what's the problem? it only when a tenant thinks it's ok to hand back something that is not suitable for another to move into when the trouble begins. they just need to clean and garden! then there is no issue.


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