Generation Rent claims that tenants lose 'millions' in unfair deposit deductions

Generation Rent claims that tenants lose ‘millions’ in unfair deposit deductions

blue piggy bank upside down with coins spilled
12:01 AM, 22nd July 2025, 9 months ago 11

Nearly half (46%) of renters are unaware they can contest deposit deductions they believe are unwarranted, which means renters are losing out on ‘millions’.

The survey from Generation Rent also reveals that only 4% tenants have used the formal dispute resolution process to recover their cash.

The campaign group says it now wants the process to be revamped with clearer rules and to prevent ‘threats and delaying tactics from landlords’.

It is also calling for a 10-day resolution timeline.

‘Millions in unscrupulous landlords’ pockets’

The group’s deputy chief executive, Dan Wilson Craw, told The Guardian: “Ultimately, that puts millions more in unscrupulous landlords’ pockets.

“The uncertain timescales and unclear rules of the deposit system, as well as obstructiveness and threats from some landlords, mean that accepting unfair deductions to get some cash back quickly can feel like the better option.”

He added: “But because challenging deposit deductions is usually worth it, renters put off from doing so are losing hundreds of pounds of their own money.”

The survey of 2,000 private renters found that a quarter of tenants claimed that disputing deductions faced landlords who threatened larger claims or refused to engage in adjudication.

They also said that landlords failed to secure the deposit in a government-approved scheme initially.

Call for confidence to be restored

Despite these challenges, data from the Tenancy Deposit Scheme (TDS) highlights that 77% of tenants who pursue disputes recover at least part of their deposit.

And 32% retrieve the full deposit amount.

On average, tenants who challenge deductions reclaim 79% of the contested amount.

Mr Wilson Craw says that challenging deposit deductions tends to be worthwhile, though renters who are put off are ‘losing hundreds of pounds’.

He is urging the government to use its review of deposit protection to restore confidence in the system.

That will, he says, ensure tenants feel empowered to contest unjust deposit claims.

Generation Rent deposit demands

Other reforms to the deposit system demanded by Generation Rent include a 14-day deadline for deposit returns after a tenancy ends.

It is also calling for mandatory landlord participation in dispute resolutions.

The group also calls for ‘meaningful penalties’ for landlords and agents who violate rules or repeatedly make excessive deductions.

A spokesperson for the Ministry for Housing, Communities and Local Government said: “It is completely unacceptable to unfairly withhold a tenancy deposit, and this government is cracking down on rogue landlords who make tenants’ lives a misery.”

They added that the Renters’ Rights Bill will improve access to landlords’ financial records to address suspected abuses.


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Comments

  • Member Since January 2024 - Comments: 346

    10:21 AM, 22nd July 2025, About 9 months ago

    Does this mean that 46% of tenants cannot read? The literature that is issued when deposits are held by various deposit schemes is perfectly clear.

  • Member Since July 2013 - Comments: 1998 - Articles: 21

    10:28 AM, 22nd July 2025, About 9 months ago

    I think the 46% figure is spurious.
    Landlords are required, under threat of a large fine, to serve prescribed information on tenants. Page 2 of the DPS form says:
    “The DPS Dispute Resolution Service is a free, straightforward way of resolving deposit disputes at the end of a tenancy. The alternative option is to go through the courts, which can be costly and take a long time.
    When using this service, your dispute will be reviewed by a legally-trained adjudicator. They’ll review the evidence you and your tenant provide and issue a detailed decision within 28 days.”
    On page 3 it says: “For details of the circumstances when the landlord or letting agent may retain part or all of the deposit, please refer to the following clauses of the tenancy agreement.”
    Any tenant reading that should realise they can challenge a deduction. If they don’t, well, let it be a “teachable moment” as they say.
    For custodial deposits the tenant will be asked by the DPS or other deposit holder if they agree the deduction. How many of the 46% didn’t realise that they could disagree?
    For insured deposits and custodial deposits too, there is nothing unscrupulous when making a claim in saying: “I could claim the whole deposit but if you agree £X I will accept that”.
    This saves the landlord or his agent hours of work. As any landlord will know unless the claim is in excellent order the adjudicator will bend over backwards to give money back to the tenant. Landlords cannot recover the costs of preparing a claim so it makes sense to reach a compromise with or, in Generation Rent-speak, threaten the tenant.

  • Member Since January 2024 - Comments: 346

    10:33 AM, 22nd July 2025, About 9 months ago

    There is a big difference between serving and reading:-)

  • Member Since September 2024 - Comments: 95

    11:02 AM, 22nd July 2025, About 9 months ago

    I’d support the 14-day limit for deposit returns as soon as the courts achieve a 14-day limit on evictions.

  • Member Since June 2019 - Comments: 778

    11:11 AM, 22nd July 2025, About 9 months ago

    Trouble is we are expected to provide actual independent quotes, these may not be achievable in the timescale they demand.

    PS landlords here have lost way more when the deposit has not covered damage – across two bad tenants I lost just under 10,000.

  • Member Since January 2022 - Comments: 267

    11:42 AM, 22nd July 2025, About 9 months ago

    Reply to the comment left by Ian Narbeth at 22/07/2025 – 10:28
    I also would like to challenge the process Generation Rent uses to select the sample of 2000?
    Is it from their data base of ‘members’?
    Is it geographical across Uk?
    Is it a statistical cross section of ‘renters’?
    Etc!
    If not why not?

    They suggest 4% of those tenants ( why has this been changed from renters)? Have used the formal dispute resolution process. Why is that?
    Are there any stats on the ‘type’ of damage the landlord is claiming?
    Or does the renter have a copy of an inventory (prepared by an independent company ) at the start of their renting?
    Which all my new renters receive and they have the right to challenge anything they find incorrect at the start of their contract. When they leave I ask the same company to re inspect the property being vacated.
    Yes it costs me money. Generation Rent uses
    “DO YOU THINK THIS IS ACCEPTABLE?”

  • Member Since July 2013 - Comments: 754

    12:32 PM, 22nd July 2025, About 9 months ago

    Reply to the comment left by JeggNegg at 22/07/2025 – 11:42
    No matter how good a landlord you are at the outset and throughout the tenancy, often that all goes out of the window at the end when it comes to discussing deposit return. Despite providing independent in/out inventories plus a comprehensive spreadsheet of damage/replacement and repair costs, many tenants just don’t want to accept deductions and ‘argue’ mercilessly without foundation. I’m thinking particularly about students here who are often ‘guided’ by the student union.

    At the start of a tenancy I use electronic signatures on all documentation, and most times the speed of return tells me that tenants don’t bother to read it. I end up having to explain the principles all over again at check in.

    No matter how well the property is presented at tenancy start or how poorly it is returned at the end, or how many procedural hoops we have jumped through to do the right thing and remain compliant, or how badly a tenant has behaved and ignored their own obligations, according to Generation Rant, everything bad is the landlord’s fault.

    Perhaps they should walk even a yard in our shoes and see reality for a change.

  • Member Since January 2022 - Comments: 267

    2:05 PM, 22nd July 2025, About 9 months ago

    Freda Blogs. Thank you for your comments.
    I think the trouble is organisations like GR possibly would not exist if they could only give a balanced viewpoint..

    Yes it would be interesting , should they ever read anything in Property118.com, if they took up your challenge to make an honest attempt of understating what most landlords do to try and have a long term tenants.

    Silly me I was dreaming!

  • Member Since September 2018 - Comments: 3515 - Articles: 5

    5:26 PM, 22nd July 2025, About 9 months ago

    “It is completely unacceptable to unfairly withhold a tenancy deposit, and this government is cracking down on rogue landlords who make tenants’ lives a misery.”

    The two are not connected.

  • Member Since January 2024 - Comments: 346

    5:45 PM, 22nd July 2025, About 9 months ago

    Reply to the comment left by Reluctant Landlord at 22/07/2025 – 17:26
    The two brain cells?

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