Why Deposit Reform is Needed

The average deposit to renters is over £1,100. This sum is often doubled due to delays while tenants try to get their previous deposit back. This leaves a third of renters having to pay a new deposit before they receive their previous one back.

In many cases this results in almost half of renters having to take out loans to cover the cost of their deposit when moving home. TAlmost half of tenants who wish to move to a new rental property jave had to use a credit card, loan, overdraft or borrow cash from friends and family to fund the deposit on their new home. The government has accepted that tenancy deposits are a problem. More than £4bn of public money is locked up in deposits across England and Wales. So property experts are now calling on the government to embrace tech solutions to help solve the problem, including:

• Tax incentives to landlords who choose to opt for alternative deposit solutions
• The establishment of a central clearing system to manage all tenancy agreement transactions
• The appointment of an independent adjudicator to settle disputes between landlords and tenants

How Can We Help?

Ringley has been looking after landlords and their tenants for almost 30 years and we have created a proptech solution – PlanetRent. This has been devised to manage the ever changing nature of the tenancy process and tenancy compliance. We realise that it is difficult for tenants to fund their deposits. At the same time it is equally as difficult for landlords to make sure that their properties don't suffer damage beyond 'fair wear and tear'. PlanetRent offers landlords the option to embrace deposit-free renting so tenants can opt to pay the equivalent of one week’s rent (as a deposit alternative) whilst the landlord receives eight weeks' rent cover.

We would like to see the establishment of an easily searchable database of troublesome people, namely those who have lost previous deposit adjudication. We encourage the call for a single independent adjudicator to preside over disputes between landlords and tenants.

Letting agents are already over-worked with significant legislative compliance including Ombudsman membership and Deposit Scheme membership. This would bring private landlords into line with the agents and their existing roles.

The government should offer tax incentives to landlords who opt for deposit alternatives. The challenge here is to meet the needs of the 'perfect tenant' who will be guaranteed to lose one week’s rent in buying a deposit alternative, but, being perfect, they would expect to get their deposit back in full.

The other benefit of a single clearing system to manage all tenancy transactions, is that it would be almost impossible to have undeclared income hidden from HMRC!