Government plans for deposit passporting

Government plans for deposit passporting

9:17 AM, 28th June 2019, About 2 years ago 49

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More than 4 million people live in the private rented sector, yet when moving home, some tenants can find it a struggle to provide a second deposit to their new landlord, risking falling into debt or becoming trapped in their current home. Ministers want to understand the scale of this problem.

Ministers are inviting proposals to make it easier for renters to transfer deposits directly between landlords when moving from one property to the next.

Freeing up deposits and allowing a renter’s hard-earned cash to follow them from property to property as they move to take that perfect job, to move nearer to family, or find a place that suits their changing needs will create a fairer housing market that works for all.

Director of policy and practice at the NLA, Chris Norris, 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.”



Comments

by David Price

10:14 AM, 29th June 2019, About 2 years ago

Reply to the comment left by PJB at 29/06/2019 - 09:48
I can see a role for Shelter here in providing bridging loans.

by Luke P

11:19 AM, 29th June 2019, About 2 years ago

Perhaps tenants, upon signing their very first tenancy should be required to pay twice the deposit into a scheme…one of which the LL cannot touch/access in relation to that particular tenancy. Upon the tenant leaving the first property, the ‘second deposit’ is ‘released’ (or rather allocated) to the new LL. Once the original tenancy’s deposit claim has been settled, any balance is also transferred to the new property with any top-up being a mandatory requirement on moving.

I have to mandatorily find SDLT if I choose to move, even if I have the purchase price saved. After all, the above would’ve good practice for the OOs they’re all going to become…!

by Paul Maguire

11:24 AM, 29th June 2019, About 2 years ago

Having just emerged from a 3 month battle to release funds from a matured Trust Fund I've found that Financial Institutions do their best to hang on to the money for as long as possible whilst citing fraud and money laundering reasons. My stockbroker is also declaring a 90 day period before funds can be returned. It also took a few months to regain the last deposit used for final rent as the ex-tenant didn't reply to the Scheme's emails. I don't see the passporting system being of any benefit as the tenant will still have to pay the deposit for their new home before they receive the deposit from their old one. Passporting will add another decision process into the mix. Just my opinion with no pertinent facts to hand.

by David Price

11:30 AM, 29th June 2019, About 2 years ago

There is no need for all these complicated schemes. It is up to the tenant to save enough for a second deposit before deciding to move, after all it is what OO's have to do, why should tenants be treated differently?

by PJB

11:33 AM, 29th June 2019, About 2 years ago

Reply to the comment left by Luke P at 29/06/2019 - 11:19However it is re-jigged, it boils down to the need of the (new) tenant to dip into his/her own rainy day fund ahead of entering into a new agreement. It is called a savings plan. It can be administered by the tenant or government (not going to happen) or by others.
The alternative would some kind of loan arrangement. The deposit bridging loan solution would be the most appropriate.

Both schemes can run alongside each other.

by Beaver

12:50 PM, 29th June 2019, About 2 years ago

Reply to the comment left by Dylan Morris at 28/06/2019 - 10:53
I'm the same. I find that tenants try to hide damage they've done in the hope that you'll not notice and release the deposit. I don't let the deposit go until at least a couple of days after they've vacated so that I have a chance to find out everything that they've done. Tenants also damage the property in moving their furniture out, or leave rubbish behind for you to clear, which costs you both time and money. They also make a mess of the carpets and you don't know how much time and money the clean up is going to take until after they've moved on.

So I can't see how this could work unless the council provided temporary accommodation between tenancies with a private landlord.

by PJB

13:26 PM, 29th June 2019, About 2 years ago

Reply to the comment left by David Price at 29/06/2019 - 10:14
Yes, I can see a win-win-win situation if Shelter did provide specific deposit bridging loans. Good suggestion.

by Old Mrs Landlord

13:44 PM, 29th June 2019, About 2 years ago

Reply to the comment left by PJB at 29/06/2019 - 13:26
You took David's suggestion seriously? I was enjoying his well-evidenced sense of humour.

by Paul Shears

13:46 PM, 29th June 2019, About 2 years ago

Reply to the comment left by Paul Maguire at 29/06/2019 - 11:24
Sadly, painfully, and very reluctantly, I must agree.
This absurd idea that just one more process - one more regulation - will solve more problems than the utterly inept implementer will create, will be the end of all of us I fear.
I found from previous long experience, for example, that the legal body that regulates solicitors in the very simple process of conveyancing on a standard property, are even more incompetent that the worst of the solicitors. I won my case, which dragged on for nearly a year, but the effort was simply not worth it.
I see the same problem in every walk of life.
You simply cannot send someone on a training course and expect them to return more intelligent and with better real judgement than they had prior to being trained.

by PJB

13:53 PM, 29th June 2019, About 2 years ago

Reply to the comment left by Old Mrs Landlord at 29/06/2019 - 13:44
Think about it. Shelter gets involved at the coal face and becomes part of the PRS supply chain. Tenants get a 'Shelter' approved loan and, more importantly, there is no need to tinker with the current deposit system.
I am looking at the bigger picture, not just selfish interest.


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