Most renters fork out huge amounts of cash at the start of their tenancies in the form of deposits, with the hope that it will be returned to them when they decide to move on, but surprisingly large numbers of tenants aren’t getting their money back.
New research from student lettings company SPCE has found that around 16% of renters believe their landlord or letting agent has “unfairly” taken money from their Tenancy Deposit, with the same percentage – or 2.34 million people – saying that they wanted to challenge the deduction but were unsure how to do so.
Normally, a full month or even six weeks’ rent is required by landlords or letting agents from tenants in order to secure a property at the start of a tenancy. This is then paid into a government-backed Tenancy Deposit protection scheme, where it is registered and held until the tenancy ends, provided the tenant meets the terms of the agreement, doesn’t damage the property and pays their bills on time.
Large sums of cash
With average rents in the UK now around £1,196 a month, this is a huge amount of money to stump up if this is the deposit amount, and many tenants will be relying on getting the full amount back in order to put it towards their next rental home, or to contribute towards buying a property.
The survey also found that the most likely demographic to not get their full deposit back was university students, with 30% affected by tenancy deposit deductions, followed by 25% of those aged 18 to 34.
Leon Ifayemi, CEO and co-founder of SPCE, said: “With rent prices at record highs, the financial demands placed on tenants looking to secure a property has never been greater. The amount of money required upfront can be significantly high, and the risk of losing some of a deposit can cause notable financial stress to those attempting to move to another property.
“More should be done to increase awareness of the frameworks in place for those seeking to challenge unfair attempts to take money from a tenancy deposit – this is a legal right that cannot be ignored, with students as well as young people generally clearly requiring greater support and education as to their tenant rights.”
Deposit theft
According to research by Dlighted, tenancy deposit theft convictions have also increased, with £1,162,037 being stolen last year by landlords and letting agents, which is 14% higher than in 2016. The analysis also found that there have already been convictions for the theft of more than £400,000 so far this year.
In 2017, the amounts stolen ranged from £595 to £130,000, with 27 convictions for theft, fraud and embezzlements linked to tenancy deposits.
Renting reform campaigner Ajay Jagota said: “Our deposit system doesn’t just make it easy to misappropriate tenant’s cash, it makes it easy to cover your tracks, too. At the same time it makes it harder to find and keep good tenants and to make a profit out of renting out property. I’ve said it before and I’ll say it again, 2018 is time to ditch the deposit.”
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