Kept deposit money could result in bigger tenant debt

The group found that 56 per cent of landlords did not return their tenants’ deposits for a variety of reasons such as property and furniture damage, cleaning costs, missed rental payments or unpaid utility bills.

As a result, many tenants are forced to go into debt in order to pay for the deposit of a new property, sometimes also losing money into the costs of legal actions to resolve disputes with their landlords. This could also leave the unfortunate tenants needing debt advice.

In April, a Tenant Deposit Scheme aimed at protecting both landlords and tenants was introduced.

“The Tenant Deposit Scheme is designed to give both tenants and landlords peace of mind, and in the event of any dispute, all cases will be treated fairly,” Jeremy Claridge, head of specialist mortgages at Alliance & Leicester, explained.

“This should make both renting and letting a less stressful experience overall, and hopefully the landlord/tenant relationship should shake off the traditional image of warring partners,” he added.

However, although landlords are now legally obligated to join the schemes in England and Wales, many are unaware of its existence, with landlords in the south and the south-east being the most unaware.