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

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.