Activists calls for action on landlord ‘exaggerated’ deposit claims

Tenant activists are calling for insured deposit schemes to be scrapped to create a fairer system for renters.

Generation Rent has handed in a petition with 17,000 signatures to the Housing Secretary Angela Rayner claiming the current system makes it too easy for landlords to delay returning deposits.

The group highlights that custodial schemes, which returns undisputed money to tenants while making a decision, make 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.

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.”

The petition also suggests imposing fines on landlords who repeatedly get exaggerated claims rejected by the deposit schemes.

Analysis by Generation Rent highlights that 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.

Deposit disputes

Generation Rent suggests 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.

With current scheme contracts expiring in 2028, the Government has previously said it is considering scrapping insured deposit schemes as part of reforms of the sector.

Holly Williamson, Chief Executive of Generation Rent, (pictured), says: “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.”

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Author: Gemma