x
By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards

TODAY'S OTHER NEWS

Government considers ‘deposit passports’ in yet another rental reform

The government is considering the idea of a deposit passport for use by tenants when they move from one property to another.

A call for evidence has been made by the Ministry of Housing, Communities and Local Government, with agents and all others wishing to put forward suggestions being asked to do so by early September. 

The announcement came initially yesterday morning, tacked on to the end of a much more detailed statement about leasehold properties. 

Advertisement

It said: “More than four million people live in the private rented sector, yet when moving home, some tenants can find it a struggle to provide a second deposit to their new landlord – risking falling into debt or becoming trapped in their current home. Ministers want to understand the scale of this problem.

“Ministers are inviting proposals to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next. Freeing up deposits and allowing a renter’s hard-earned cash to follow them from property to property – as they move to take that perfect job, to move nearer to family, or find a place that suits their changing needs – will create a fairer housing market that works for all.”

However, then Housing Secretary James Brokenshire issued the formal call for evidence which seeks so-called “innovative solutions” to reduce the cost of moving for tenants. 

Brokenshire’s forward to the 35-page document says: 

 

“I am committed to making the process for tenants getting their deposit back much smoother. I want to understand whether there should be a deadline for landlords returning deposits. I also want to look at whether existing initiatives are meeting tenants’ needs and whether the market can offer improved products. Alongside this, I want to look more widely at whether innovative approaches to helping tenants move more easily, including allowing tenants to passport their deposit between tenancies.

“It is important that good landlords have the confidence to let out their properties safe in the knowledge that a deposit will provide them with reasonable protection from damages to their property. Any improvements to the way deposits are returned at the end of a tenancy will need to ensure that deposits still serve this purpose and that deposit protection continues to work well for both tenants and landlords.”

You can see the full call for evidence here.

  • Emma Hamilton

    Saw this on the news yesterday and couldn't believe it. Why can't they just save up like everyone else has to if they want something. They'll be asking us to pay their rent next!

    icon

    Save!! A large number of tenants are barely managing to afford to pay their rent let alone paying to put food on the table. I don't think you live in the real world!!

     
    icon

    The difficult for people moving between properties is that it is an exceptionally expensive time, even if moving between properties of commensurate value. Between moving costs, exorbitant estate agents fees, having to pay a month's rent up front and a security deposit of the same value etc. it puts a strain on most people's finances, plus if people are moving for work they may not see another pay day until the following month end. Most people don't have a spare few thousand pounds to cover these costs, especially with the reticence displayed by some landlords and letting agents in returning deposits in a timely manner.

    I'm not suggesting this is anyone's fault or the tenant's new landlord's problem, however to say 'Why can't they just save up like everyone else has to if they want something,' displays staggering ignorance to the realities people moving face. It's not like they If we can come up with a way to make it easier for tenant's to move then this is better for the market and for landlords getting new tenants in.

     
    icon

    James Harvie. Which exorbitant estate agent fees are you referring to? We don't charge the tenants any fees.

    Sue Kelly. Which world do you live in? People aren't struggling to pay rent or put food on the table where we are. The council pay so much out in benefits they live a better life than I do.

     
    icon

    Gordon Brown, this burden has been reduced since the tenant fee ban. However, you cannot be serious in suggesting that agencies hadn't been charging excessive fees for work, most of which is automated, of several hundred pounds.

    You may have been a good Samaritan, but most agencies are run by incompetent greedy morons with not the first inkling of business acumen, hence the appalling reputation the industry has as a whole. I can honestly say that a sweeping wave of professionalism is desperately needed to clear up the amateur s**tshow that is the PRS. Between most agencies, many landlords, and the councils and charities trying their best keeping the worst tenants in properties at the expense of landlords, it is a shambles from top to bottom. Landlords and tenants both get shafted by the way the sector is at the moment.

    I'm 24 and have only worked in the PRS for a year whilst doing my masters degree and this has been more than readily apparent to me, so I fail to understand why nothing gets done, but I'll be glad when I finish my degree and can move on.

     
    Suzy OShea

    They do if they are on benefits: forced loan by the councils of six weeks rent whilst they sort out the admin. Then the rent is usually paid to the tenant directly and that's when they move out having defrauded the benefits Housing Department Office, the local tax-payers and the landlord. So some tenants are already asking us to pay their rent! Wakey wakey! Best not to take anyone on benefits. Sorry but this is the sad reality!

     
    James B

    Sue Kelly
    This is not a page for disgruntled tenants to vent off at letting agents

     
  • icon

    Currently with the DPS when i tell them to send All of the Deposit back to the tenant the DPS then want to hear from the tenant saying that they are happy for all the depisit to be returned to them!! How weird is that. Stupid clueless DPS who dont even know how to arbitrate. TDS not much better. Just make All professional LLs keep the deposit in a Seperate Deposit Account in the LLs name. Simple

    Barry X

    Steve Sykes - I agree with you in principle and wish it were that simple. The problems are slightly obscure but big obstacles none the less;

    (a) The deposit "protection" schemes (a big misnomer in itself) are big business and lining pockets so not likely to be abolished even though completely unnecessary and just another legacy of damage from the incompetent Blair Government and its ridiculous failure, the Housing Act 2004 (though in so many ways all subsequent regimes have been almost equally devious, damaging & incompetent, and May's is probably by far the worst)...

    (b) the government LOVES these schemes because they finally help provide some stats and real details they never had before about landlords, the properties they own, rents charged, deposits taken and names and addresses.... all potentially very useful to them in the long run (if they ever get their act together with HMRC and sharing data) for investigating and collecting tax etc. And in theory all policed for them for free by bribing tenants big-time (with a 3-times the deposit "winnings" for snitching), and scaring the landlords with yet another piece of undermining of the validity/enforceability of the s.21 notice.... Yes, its "Big Brother" stuff with a sledge-hammer-to-crack-a-nut approach.... are you surprised?

    Before the 2004 Act (that came into force for the deposit provisions on Good Friday in 2006 when all bank systems were down so Day-1 was its first test and a complete fiasco - I remember it well... another brilliant piece of planning and "due diligence" - not - by the government). Before it there was no real problem anyhow because there were plenty of legal protections available for tenants to take on rouge landlords and chase for their refunds, if valid. all that was needed - if anything - was perhaps to make it easier for tenants to make claims and to add/improve better ADR (that comes with the "protection" schemes) instead of the existing courts mediation service that can be good but isn't perfectly tailored to tenant deposit disputes.

     
  • icon

    WHAT? Quote - “I am committed to making the process for tenants getting their deposit back much smoother. I want to understand whether there should be a deadline for landlords returning deposits." YES well read the deposit scheme RULES then!!! There has been a deadline date for deposit returns for many years !!

  • icon

    QUOTE " “Ministers are inviting proposals to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next. Freeing up deposits and allowing a renter’s hard-earned cash to follow them from property to property – as they move to take that perfect job, to move nearer to family, or find a place that suits their changing needs – will create a fairer housing market that works for all.”
    WHAT! About the landlord's hard earned cash and HOW can a ONE deposit indemnify TWO landlords at the same TIME?? SCENARIO 1 - Outgoing landlord allows deposit on his property to be moved over to new property. Tenants have been good so far and promise the earth. LL goes to check his property when they have gone - i.e. cooker not cleaned, garden full of weeds, old fridge and rusted trampoline in garden etc TOO LATE - deposit given now to new landlord! SCENARIO 2 - Outgoing and Ingoing LLs come to a compromise -half of deposit moved to new LL - Tenants move out, outgoing LL checks property, £400 damages and one weeks rent arrears, but WHOOPS, only £250 left in kitty?? (BTW the average deposit in our area is £500) In both cases, tenants have no money can't save as life is too hard for them and they can never pay it back. Surprise? Are these minsters MAD? We all have to pay in this life and YES these minsters have absolutely no grip on life outside of London. GUESS WHAT! I had an idea! Why don't the government start a thing called social housing and don't charge a deposit at all and when it all goes horribly wrong the British tax payer can cover all the damage and losses. That sounds like a plan.

  • S l
    • S l
    • 29 June 2019 11:00 AM

    wish all our comments can go to the national press and hold the minister accountable

  • Bryan Shields

    I wish that there is a way to have a TENANT TO HAVE A GENUINE STAKE IN LOOKING AFTER ANY PROPERTY THAT BENEFITS THEMSELVES. the old deal was the deposit. Unconnected bodies, eg - tribunials in deposit schemes - were supposed to cover that. In practice that hasn't worked very well at all. This lacks harms all concenrned ib my view.

  • icon

    If a tenant is unable to save for a deposit on the next home they want to rent then they clearly must have lied about their income to get the current home or perhaps they were not credit scored properly. This is therefor down to the agent/landlord just not doing their job properly at the outset. No fees chargeable to tenants will mean less of them qualify so more will be homeless. That's going to be a shame. Caz Cazza has the idea in a nutshell. No cleared funds deposit no tenancy granted no if's, no but's and no maybe's. If a tenant can't afford a rented property then he should not be a prospective tenant. The application should be binned.

  • icon

  • Kristjan Byfield

    In principle, this solves an issue for many tenants struggling with cashflow. The simplest of solutions alongside this would be a low-cost insurance product the tenants pay (say £30) for which guarantees the funds transferable to the new landlord to complete the deposit.

    S l
    • S l
    • 01 July 2019 13:27 PM

    That would not guarantee the deposit amount required if any deductions is made against rent arrears, damages caused by tenants etc

     
  • icon
    • 01 July 2019 13:48 PM

    It seems to be forgotten that due to the dysfunctional eviction process in the UK it could be the case that a tenant just pays 1 month's rent in advance with no deposit and then stops paying rent until evicted which could be easily 10 months.
    There is NO other service in the UK where the service provider is forced to continue providing that service for free until legally removed.
    Even 2 month's deposit is inadequate yet that is the most that should be charged so as to prevent a premium tenancy.
    Only an idiot LL would take more than 2 month's rent as a deposit.
    Tenants gain control of an asset worth easily a quarter of a million pounds for very little.
    LL take a massive business risk if they don't have RGI on the tenant or on a guarantor.
    These deposit schemes have yet to be tested thoroughly and until they can be proven to work cash deposits are the only game in town.
    Now of course restricted to a derisory 5 weeks of rent.
    Now if deposit schemes could guarantee more than two months then perhaps 6 months would be useful to the point it becomes de facto RGI.
    That would be worthwhile!

icon

Please login to comment

MovePal MovePal MovePal
sign up