Government plans for deposit passporting

by Property 118

9:17 AM, 28th June 2019
About A year ago

Government plans for deposit passporting

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Government plans for deposit passporting

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

David Price

14:20 PM, 29th June 2019
About A year ago

Reply to the comment left by Old Mrs Landlord at 29/06/2019 - 13:44
Thank for that kind comment, I am pleased that someone appreciates my sense of humour.

Beaver

14:23 PM, 29th June 2019
About A year ago

Reply to the comment left by PJB at 29/06/2019 - 13:53
You may have a point: They have the money..they don't spend it housing people....and it would be great to have Shelter saying to the tenants they are trying to help..."...if you want your deposit back don't trash the house and clean up properly before you leave.." 🙂

Old Mrs Landlord

14:37 PM, 29th June 2019
About A year ago

Reply to the comment left by JJ at 29/06/2019 - 14:23
Not gonna happen. May be sensible but doesn't fit their agenda.

Paul Maguire

15:38 PM, 29th June 2019
About A year ago

I've threatened young tenants in the past with phoning their mum's to come and tidy up the mess their kids are living in. What about having mums as deposits instead and releasing them once the property has been properly cleaned.

Jireh Homes

9:37 AM, 30th June 2019
About A year ago

Government needs to know of the concerns with the proposal so trusting many have contributed to the consultation, as suspect the mandarins are not reading this post.

Ian Narbeth

10:54 AM, 1st July 2019
About A year ago

Reply to the comment left by David Price at 29/06/2019 - 08:19The point is David that describing it as rent in advance does not mean that it is, especially if you say it is "first and last month's rent." You are effectively holding a sum equal to one month's rent for a lengthy period. That looks like a tenancy deposit.

Paul Maguire

11:37 AM, 1st July 2019
About A year ago

Reply to the comment left by Ian Narbeth at 01/07/2019 - 10:54
No Ian, it's 2 month's rent in advance. They pay another monthly rent one month after moving in. Deposit Schemes don't pay any interest to the tenant even if they've held it for years. 2 months in advance means the tenant gets the same monetary value back after maybe many years in situ so in a way it's index linked. A deposit is explicitly for monies due at the end of the tenancy for costs to put the property back to it's prior condition after allowing for wear and tear, rent arrears and unpaid bills. I have a seperate clause for these but have never had to enforce it. My experience is that in the majority of cases treating tenants fairly is reciprocated and I've had very few slaps across the chops in the past 20 years. Only 3 in fact and not huge amounts.

Ian Narbeth

11:53 AM, 1st July 2019
About A year ago

Reply to the comment left by Paul Maguire at 01/07/2019 - 11:37So that we are clear. With a rent of say £1000 pcm, you take £2000 on say 1st July and then £1000 on each of 1st August, 1st September etc. £1000 of the £2000 looks very much like a disguised deposit.
You will also be caught by paragraph 1 of Schedule 1 of the Tenant Fees Act 2019 which prohibits taking larger monthly rents followed by reduced rents. In my example the tenant can demand the return of the additional £1000 and can report the landlord to Trading Standards.

Paul Maguire

13:09 PM, 1st July 2019
About A year ago

Reply to the comment left by Ian Narbeth at 01/07/2019 - 11:53
Ian. I did mention before that I'm in Scotland with a different set of tenancy laws. I do take a deposit for a property in the countryside rented to a family but it's also 2 month's rent in advance. Rented by the room with 2 properties is just 2 month's rent in advance and no deposit. I'm happy to defend myself in Court if it comes to that.

Beaver

13:11 PM, 1st July 2019
About A year ago

Reply to the comment left by Paul Maguire at 01/07/2019 - 13:09
In your opinion are Scotland's tenancy laws better or worse than those operating in England, and if better, why?

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