Tenancy Deposit Protection shows early success

A Government drive to prevent rogue landlords wrongfully withholding tenants' deposits is showing early signs of success, according to figures published for the first time today.

Tens of thousands of people living in rented houses and flats have already had their deposits safeguarded in the two months since the launch of Government-authorised schemes which, for the first time, protect tenants' deposits.

Figures supplied by the three Tenancy Deposit Protection (TDP) schemes show that 66,000 deposits have been protected at a rate of over 1,500 deposits per day. Over £58 million worth of deposits are now protected by the schemes.

Communities Minister Baroness Andrews said: "This great start to the new tenancy deposit protection schemes shows that time is up for rogue landlords who refuse to repay deposits and tenants who leave without paying their last month's deposit.

"These schemes don't just protect pounds and pence, they offer peace of mind. Before we took action, many tenants and landlords found themselves caught up in bitter and often protracted financial disputes. The new rules now offer greater certainty and strike a fair balance between the rights of landlord and tenant.

"It's particularly pleasing to see strong support for the schemes from landlords and agents, as it highlights the growing recognition that the initiative will also benefit landlords by bringing about a fair and sustainable rental sector. We're confident that take up will continue to rise."

Liz Phelps, Social Policy Officer at national charity Citizens Advice Bureau, added: "It's great news that tenancy deposit protection has got off to such a good start. By signing up, landlords are demonstrating that they are providing a professional service in which tenants can have confidence. As more new tenancies come under the scope of this protection, we hope we will see fewer tenants needing to come to Citizens Advice Bureaux because of disputes over the return of their deposits."

David Salusbury, Chairman of Tenancy Deposit Solutions Ltd, one of the scheme providers, said: "Tenancy deposit protection is gradually becoming part of the private-rented sector scene. Hopefully it will play its part in raising standards and increasing professionalism across the sector, which should benefit not just tenants but also landlords and agents.

"As with all new initiatives there has been some confusion with rumours surfacing that landlords would no longer be allowed to hold deposits. However, I believe all parts of the sector are now getting to grips with what tenancy deposit protection actually involves and that bodes well for its success."

From 6 April this year, landlords and agents have, by law, had to sign up to one of three Government-backed schemes when they take a deposit. All three schemes have reported high levels of interest.

Latest figures from the Survey of English Housing 2005/06 indicate that almost two out of ten tenants (17 per cent) felt that some or all of their deposit had been unfairly withheld. That means that up to 246,000 deposits (or up to £172 million) could have been wrongly withheld.

There are 1.7 million assured shorthold tenancies, to which tenancy deposit protection applies, accounting for just under one in ten (8 per cent) of all households in England (2005/06). The average deposit is £700.