£27 million of deposits held in rental disputes

£27 million of deposits held in rental disputes

10:28 AM, 13th June 2022, About 2 years ago

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The latest figures from mydeposits show that while tenancy deposit disputes did see a year-on-year decline in volume during 2021, there was still an estimated £27 million worth of deposits held in rental disputes between landlords and tenants.

At an average of £1,005 per tenancy, the cost of a deposit has fallen by 1.2% year-on-year. Over 4.5m tenancy deposits are protected across the UK rental market, up 2.3% on the previous year alone. This means a huge £4.6 billion is held in deposit protection schemes, again up 1.1% on the previous year.

The good news is that the number of challenges being made and the sum that is being challenged have both shown an annual decline.

The average amount disputed fell from £793 to £784 in 2021, while the total number of disputes also declined by 12% to 34,444 last year. This means that the number of disputes as a percentage of all deposits held has dropped as well, down from 0.9% to 0.8%.

But despite such a small number of tenants disputing the deductions made to their tenancy deposit, mydeposits estimates that the total value of rental deposit disputes sat at almost £27 million in 2021.

The most common reasons? 

Cleaning was by far the most contentious issue between landlords and tenants when it comes to deposit disputes, with damages to the property, redecoration costs, gardening and rent arrears also ranking high.

Eddie Hooker, CEO of mydeposits and the Hamilton Fraser Group says:

“It’s only natural that a certain number of landlords and tenants won’t see eye to eye when it comes to rental deposit deductions. On the one hand, the deposit held is a considerable sum of money for the average tenant. At the same time, landlords will understandably expect their property to be returned in the same condition as it was let and to be paid the rent owed in full.

“The good news is that deposit deduction disputes are actually few and far between and account for less than one per cent of all deposits held within authorised protection schemes.

“We’ve also seen a reduction in total disputes lodged, which suggest the rental sector has become a more harmonious place over the last year, or that tenancies post-pandemic are increasing in length, resulting in less end of tenancy issues. Either way, it looks as though the sector is heading in the right direction where tenant-landlord relationships are concerned.”

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