Government misses expected date for tender launch
Renters in England have demanded a fairer deposit system that returns money more quickly at the end of tenancies and penalises landlords who make false claims.
Generation Rent handed in a petition with 17,000 signatures to the Secretary of State for Housing, Communities and Local Government this morning.
The proposals could make 300,000 private renters hundreds of pounds better off every year, and make sure that the interest on all £5.5bn of renters’ money is used for their benefit.
The government has an opportunity to adopt these proposals as part of the reprocurement of the deposit protection system. The tender for this was expected by 31 August but has still not been published.
Generation Rent’s petition calls for an end to insurance-backed schemes, which currently allow landlords to keep the interest on the cash they hold, make it easy for bad landlords to delay returning deposits at the end of tenancies, and put renters’ money at risk if letting agents go bust.
Landlords can currently choose to protect deposits in a custodial scheme, which returns undisputed money to tenants while making a decision, making it easier for renters to challenge unfair deductions. But under insurance-backed schemes, landlords can put pressure on renters to settle for less than they’re entitled to.
Even though renters who challenge deductions get 79% of their deposit back, just one in five who face unfair deductions actually raise a dispute, with those who don’t put off by potential delays or uncertainty about their rights.
With current scheme contracts expiring in 2028, the government is redesigning the deposit protection system, and a tender document was expected to be published by 31 August. However, no tender document has been published yet, meaning that the transition window to a new system is narrowing.
The government had previously indicated that the new system would involve one scheme providing a custodial scheme, whereby tenants’ money would be held by the scheme.
This would make it easier to manage a quick return of money at the end of the tenancy, and the quick resolution of disputes, while allowing interest on the deposits to be used for tenants’ benefit. In addition, introducing penalties for landlords who make repeated claims that are rejected by the scheme would deter this behaviour and restore trust in the system.
However, until the government publishes a tender confirming these details, the current system will continue.
Holly Williamson, Chief Executive of Generation Rent, said:
“Requiring landlords to protect money in the scheme rather than hold it themselves, will mean that they have to make any claim after the tenancy ends and return unclaimed cash to the tenant as soon as possible. That will make moving home a lot less stressful.
“But the government should go further and impose fines on landlords who repeatedly get exaggerated claims rejected by the deposit schemes would shut down that behaviour and get money back into renters’ pockets quicker.
Generation Rent’s previous research on the deposit dispute process can be found here:
