The Deposit Protection Service has today announced that it has been granted approval by the UK government to run an insurance-based deposit protection scheme in England and Wales.
The new scheme will run alongside the DPS’s existing custodial scheme.
The DPS currently runs the only custodial based deposit protection scheme in England and Wales and will be the only scheme to offer landlords and letting agents both options.
It will also bring the number of approved insurance-backed schemes in England and Wales to three.
The new insured scheme is due to launch in April 2013, with landlords and letting agents able to register in advance from now onwards (technically, from October 1).
As with the custodial scheme, landlords and letting agents will be able to register with the service online as well as by phone, and manage both their custodial and insured deposits through one easy online account.
The DPS insured scheme will not be charging registration fees to its customers and says it will provide ‘industry competitive protection fees’ for landlords and letting agents when the scheme launches in April.
Participation in the DPS insured scheme will be open to all private landlords on a pay as you go basis. Letting agents will need to be members of professional bodies with Client Money Protection insurance.
Kevin Firth, director of the DPS, said: “We’re delighted to be able to announce a new insurance based deposit protection scheme from the DPS brand.
“We strive to provide the industry with an excellent service, and offering both insured and custodial options will ensure landlords and letting agents have the choice of protection from the leading supplier of TDP in the UK.”
The DPS launched in 2007 and currently protects over 900,000 deposits.
www.depositprotection.com
Comments
‘industry competitive protection fees’ ?
They'd need to be paying me to ever use their services again. We spent longer trying to get them to release funds after a dispute than we ever did on the disputes themselves.
This may be the only way they will survive
So at a time when Scotland does the sensible thing and insists ALL deposits are lodged in a custodial scheme, THIS Government sends the opposite signal. We should be following the Scottish system.
Seems like a shrewd move to me as agents can access both types of scheme from one provider?
I went for the DPS custodial scheme as a) I don't have to pay an insurance fee and b) if there is a dispute I can honestly say that I am not holding the money.
I am new to the lettings business, but to me, especially in this time of very low interest rates on cash in the bank, it seems the most cost effective option.
DPS (or ComputerShare) were given £12 million pounds of tax payers money to keep them going so I can only assume that interest on deposits isn't enough.
See page 4 here: http://www.landlordssouthwest.co.uk/Data/Sites/1/newsletter_dec-2011.pdf
Suddenly my TDS membership looks good value for money.
Why? Is it because interest on the deposits they hold isn't paying enough to run the 'free' scheme? Will the 'free' scheme eventually be phased out?