17^th Jul 2019

The governemnt is discussing the option of allowing tenants to have their rental deposits transferred between landlords. This will drastically reduce the pressures on tenants having to fund a deposit on a new property, before receiving their deposit back from a previous residency.

At the recent Chartered Institute of Housing conference in Manchester, James Brokenshire, the housing secretary, told delegates that ministers are considering the deposit 'passporting' scheme.

If the scheme is passed it will help millions of UK renters when moving to a new 'rented' home, as their previous deposit will be transferred to the new landlord, if the property is kept in good condition.

The Deposit Protection Service, says that the average rental deposit is £1,040 in England and Wales, however London tenants can expect to pay an average £1,750 deposit when moving to a new 'residence'.

The Passporting scheme in theory should allow the previous landlord to arrange the direct transfer of funds to the new landlord on the day that the tenants move into their 'home'.

This does not mean that the previous landlord will lose their right to claim back any monies from the deposit if the tenant has caused any damage to the property; the tenant will have to pay any balance required to the new landlord, prior to moving in.

Apparently a trade association agrees in principle that deposit 'passporting' may have 'legs', however it does believe that it should not be made mandatory.

The association correctly points out that there must be proper procedures in place to will make sure the previous landlord is able to cover their costs, if the property is damaged or monies are owed.

The association's research has found that 33% of landlords had to keep hold of at least some of the deposit in the last year which covered damage or rental arrears.

A spokesperson said: “The idea of deposit passporting has been around for a while now, so it comes as no surprise that the Government is considering it. Mr Brokenshire acknowledges that if this is to be implemented it must be done “thoughtfully”, but we must make sure that adequate thought is given to the needs of both tenants and landlords.

“Everyone agrees that moving between tenancies should be made easier and cheaper, but we also need to recognise why landlords take deposits. A deposit protects against damage or default, so landlords must be confidence their costs are covered before releasing the tenants’ money.”


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