The Deposit Protection Service has safeguarded the deposits of more than two million tenants since it launched in 2007.
In value, deposits totalling £1.1bn have been protected since tenancy deposit protection became mandatory four years ago – a little over half of that claimed by the TDS and a little more than mydeposits.
DPS users over the period break down into 20,000 letting agents and 250,000 landlords.
The deposit pool currently stands at £550m, representing 720,000 active deposits. The figure compares with the TDS’s current tally of 1.5m deposits protected, almost all by agents – 4,000 branches.
The DPS has had 8,929 adjudications since launch in April 2007 – virtually pro rata with the TDS’s 17,134 disputes, but far less pro rata than the 14,000 disputes handled by mydeposits, which deals with slightly fewer deposits.
Of the DPS adjudications, the large proportion (41.5%) found wholly in favour of the tenant and just 19.1% wholly in favour of the landlord or letting agent, with 39.4% resulting in a split award. Mydeposits has also found that most adjudications favour tenants.
Kevin Firth, director of The DPS, said: “We’re proud to be delivering our protection services to such a significant volume of tenants, landlords and agents in England, Wales and even Scotland. It’s particularly impressive as we did not have an existing member base, so it has been great to see so many landlords and letting agents positively choosing to safeguard their tenants’ deposits with us over the years.” He also revealed that in the last year, The DPS has sent 85,000 text messages to tenants, prompting them to log on and reclaim their deposits, resulting in £2m of previously unclaimed deposits being returned. Firth added: “It’s important that we keep innovating in our use of technology to make deposit protection as easy and accessible as possible. We use SMS, we blog and we Tweet to help ensure that people are aware of their responsibilities when it comes to deposits. “Continuing to increase awareness is particularly important at the moment as – in the middle of a private rental sector boom – more and more people are finding themselves thrust into the role of reluctant landlord.
“We’re still registering around 200 new landlords a day, so I’m confident that the message is hitting home.” The DPS is the only scheme that physically protects deposits by retaining them in an approved bank account for the duration of a tenancy on behalf of tenants, landlords and letting agents.
The other two schemes are insurance-backed and do not remove the money out of the system, leaving landlords and agents free to use the money for their own cash-flow purposes unless they choose to ring-fence it in a client account.
In Scotland, where tenancy deposit protection has only just been made law, only custodial schemes such as the DPS will be allowed to operate – something that came as a surprise to the insurance backed schemes.
The DPS was also the subject of a Parliamentary question this week to housing minister Grant Shapps, on the funding of all three of the deposit organisations. See next story.