One in four renters struggle to get their deposit back when tenancy ends

A quarter of renters struggle to get their deposit returned when they moved out, new research has found.

Landlords sometimes make deductions for things like cleaning or damage.

And while you can challenge this through the deposit protection scheme, most people don’t.

In fact, figures from Generation Rent show that only one in five renters who face deductions actually go through the process of disputing them.

That’s despite the fact tenants usually win when they do.

It means hundreds of pounds are being lost unnecessarily when people move, often at a time when money is already tight.

Renters aren’t getting interest on money in deposit schemes

At the moment, over £5.37bn of renters’ money is tied up in tenancy deposits in England and Wales. 

But nearly half of renters don’t get any interest on that money, and for those that do, the total benefit is just £17m a year.

However, Generation Rent believes that if the government invested differently, it could raise up to £226m a year.

What can be done?

Generation Rent is proposing a new Renters’ Support Fund, which would invest deposits and use the returns to support renters directly.

This could offer:

• legal support for tenants whose homes are unsafe or in disrepair
• deposit passporting, so you can transfer your deposit straight to a new tenancy instead of finding the cash again
• deposit guarantees for renters in financial hardship or at risk of homelessness

“Renters face many disadvantages in the housing system,” said Dan Wilson-Craw, deputy chief executive at Generation Rent.

“Around half lack savings, making moving home a more painful process than it should be.

“Limited access to legal support means it is hard to take action if your landlord is failing to keep your home safe.

“So it is a scandal that the billions of pounds of renters’ money tied up in deposit schemes is not being used to improve the experience of renting, and in many cases sees landlords and letting agents collecting the interest.”

Mr Wilson-Craw added that with deposit schemes’ contracts up for renewal, the government has “a golden opportunity to get renters’ money working for renters”.

The government is currently reviewing how the deposit protection system works in England and Wales.