The Deposit Protection Service (DPS) is reporting that since 2007 the average tenancy deposit has risen by a massive 50% increase. Seven years ago the average rent deposit was £600 it now stands at £900.

From their study the Service has gleaned that a large proportion of landlords have dispensed with four week rent equivalent for a deposit and are now looking at a six week rent cost as a deposit.

The DCLG (Department of Communities and Local Government) gave the DPS the support and funding to conduct the research. At present the National Service looks after approximately £900 million of 1.5 million tenants' deposits. The Government wanted to find out accurate figures of what financial pressures tenants are experiencing within the private rented sector.

A quote from the report says: “We suspect that since the introduction of tenancy deposit protection, landlords have realised that four weeks’ rent is not a sufficient size deposit, so have increased it to six weeks.”

Obviously the deposit increase is seen as a major blow for tenants as the average UK wage has only risen by 13% over the same seven year period.

This has made the importance of ensuring the private rental sector in the country is stable and secure paramount, though the DPS’s figures suggest otherwise. It suggests that tenants are given little choice but to adhere to their landlord’s demands without being given the protection necessary to achieve long term financial security.

A housing lobbyist is putting pressure on the Government to help stem the influx of private renters by investing £1 billion into building 10,000 state owned, new affordable homes for owner/occupiers.

 

There would be mandatory conditions that anyone buying one of the houses could not sell it on unless the only increase in resale value is in line with inflation. Landlords would be able to purchase some of the properties however there would be strict controls on rent charges, which they would have to accept prior to purchasing.

The theory is that once the 10,000 homes had been sold then the funds accrued would be ploughed back into investing into another project upon similar lines.