Where’s my deposit? It is no joking matter for nearly 300,000 tenants whose landlord has not protected their deposit.
This has left many out of pocket without a clue of how they will manage to raise another deposit - the average amount in London stands at £1040 for their next property.
Protecting tenants' deposits has been a legal obligation since April 2007. Yet the 2016 research, from CEBR, suggested that up to £514m worth of deposit money was not protected. One in six landlords is guilty of this, knowingly or unknowingly.
This means those landlords are earn £8.5m a year in interest on those unprotected deposits.
For lodgers, it's a different story. Occupying a room as a lodger in a property does not require your deposit to be protected by law. I hear case after case of distressed lodgers who have paid a security deposit that ironically offers them no security. The only option for lodgers to dispute their deposits is through the small claims court which takes time and is costly.
Renters who might normally get Assured Shorthold Tenancies (ASTs) are finding themselves renting rooms thanks to oppressively overpriced rents - this leaves them open to exploitation.
SpareRoom.co.uk is the biggest flat sharing site which boasts that someone finds a new flatmate every three minutes. Scale that up over a year, and that's 175,200 new deposits being handed over the course of a year. Even with a lower average deposit for a room, that's millions of pounds of security deposits that might not be protected.
Back in 2013, Santander estimated that 1.7m people rented to lodgers, bringing in a whopping £3.3bn, which works out at an average of £162 a month. Assuming this is the average lodger deposit, that adds up to a further £275m of tenants' money that isn't covered by any government scheme.
My tips to avoid becoming a victim:
1. If you are a tenant with an AST check if your landlord is a member of one of the three government-approved schemes - TDS, DPS and MyDeposits.
2. Have your Landlord sign and date documentation regarding your deposit and keep a copy for yourself.
3. Try to avoid paying cash. Instead pay into a UK bank account using the reference ‘DEPOSIT’
Please also join me in calling on the Department for Communities and Local Government (DCLG) to make it a legal requirement for lodgers deposits to be protected - either joining existing rental deposit schemes that cover ASTs or creating a new one - as well as putting in place sanctions for baseless non-returns of deposits?
I am running a 38 Degrees petition to give lodgers the protection they need.
Jerome Mcbean is Founder and CEO of We Find Lodgers Ltd