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15% of landlords ignore deposit protection rules

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An estimated 300,000 private landlords are risking unlimited fines after failing to place tenant deposits into a government-backed scheme.

15% of landlords ignore deposit protection rulesLandlords have failed to pay deposits worth £514m into one of three approved schemes, according to the Centre of Economics Business Research.

The CEBR says about 85% of the estimated 2 million landlords are complying with tenancy deposit protection legislation – up from 35.2% in 2008, the year after placing deposits in a government-backed scheme became mandatory.

But the latest data suggests about 284,000 landlords are not placing deposits with the Deposit Protection Service, MyDeposits or the Tenancy Deposit Service.

The greatest value of deposits protected is in London and south-east England, with an estimated £1.2bn and £544m respectively in 2015.

Tenants can apply to a local county court if they think their landlord hasn’t used a deposit protection scheme.

If the court finds the landlord hasn’t protected the deposit, it can order the person holding the deposit to either repay it or pay into a custodial deposit scheme’s bank account within 14 days.

Fines for non-compliance are normally calculated at three times the initial deposit taken. However, there are no figures showing how many landlords have faced legal action for failing to protect a tenant’s deposit.

Between 2001 and 2014, homeownership rates in the UK fell from a high of 70% to 63%.

In the same time period, the share of private renting households has grown nine percentage points to represent almost one-fifth of households.

For more information, click on the link below:

This Is Money

Neil Jennings

Neil is the Operations Director at Assetgrove Lettings, London's Leading Rent Guarantee Company, providing Landlords with no voids, property maintenance, fee-free property management and stress-free service.

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