Millions of private renters gain voting rights under new reforms
9 months ago | 4 comments
Renters lose £169m in deposit interest every year – Claim Generation Rent
9:54 AM, 28th July 2025, 9 months ago
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Private renters across England and Wales are being deprived of £169 million in potential interest from their tenancy deposits each year, Generation Rent says.
It says that with £5.37 billion in deposits held in government-accredited schemes generate just £17 million in benefits annually under the current system.
The organisation is now calling for a Renters’ Support Fund, inspired by an Australian model, which would consolidate existing deposit schemes into a single, non-profit custodial system.
This would ensure all deposits earn interest for tenants, rather than landlords or agents.
It also says that the money generated will help tenants sue landlords over their living conditions.
Take action against landlords
Generation Rent’s deputy chief executive, Dan Wilson-Craw, said: “Renters face many disadvantages in the housing system.
“Around half lack savings, making moving home a more painful process than it should be.
“Limited access to legal support means it is hard to take action if your landlord is failing to keep your home safe.”
He added: “So it is a scandal that the billions of pounds of renters’ money tied up in deposit schemes is not being used to improve the experience of renting, and in many cases sees landlords and letting agents collecting the interest.
“With deposit schemes’ contracts up for renewal, the government has a golden opportunity to get renters’ money working for renters.”
Interest paid to tenants
Generation Rent claims that if the entire deposit pool were invested at the Bank of England’s 4.25% base rate, it could yield £226 million annually.
After accounting for £40 million in administrative costs, the remaining funds could support tenants in multiple ways.
That would include £50 million to bolster legal aid, enabling renters to challenge landlords over unsafe living conditions.
Another £25.5 million would facilitate deposit ‘passporting’, allowing tenants to transfer deposits between tenancies, cutting moving costs by an average of £817.
Also, £6.7 million would support deposit guarantee schemes for renters facing financial hardship or homelessness.
Generation Rent says that any surplus interest could be returned to tenants, separate from landlord claims.
Ditch three deposit schemes
Generation Rent is now urging the government to phase out these insurance-backed schemes in favour of a unified custodial model.
Its research also found that 16% of tenants borrowed to cover moving costs, while 29% dipped into savings.
For those unable to afford deposits, unregulated ‘deposit alternative’ products—often non-refundable fees—are common, particularly among disadvantaged groups.
Seven percent of tenants used such schemes, with 51% receiving benefits and 28% reporting disabilities, compared to 39% and 24% of the overall sample, respectively.
This reliance on costly alternatives underscores, the organisation says, a ‘poverty premium’ for vulnerable renters.
Tags:
deposit interest, Deposit Protection, england and wales, generation rent, housing reform, Private Renting, Renters’ Support Fund, tenancy deposits, Tenant rights, UK renters
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Member Since April 2018 - Comments: 365
10:18 AM, 28th July 2025, About 9 months ago
Perhaps these morons at Gen Rent should be advised that landlords and agents no longer receive interest on deposits because once again this small perk was removed from landlords and agents.This also now involves landlords and agent in more wasted time and money, which should really be charged to tenants.Look if tenants are not happy with the accommodation given they should try and find a better alternative rather than threatening legal action against landlords. Sadly it is a minority of militant people running Gen Rent and stirring up trouble that is wrecking private sector renting.
Member Since August 2016 - Comments: 1190
10:47 AM, 28th July 2025, About 9 months ago
The interest pays to run the deposit scheme.
Member Since July 2013 - Comments: 1996 - Articles: 21
10:55 AM, 28th July 2025, About 9 months ago
Reply to the comment left by David at 28/07/2025 – 10:18Agree. Interest earned by DPS, TDS etc. under custodial schemes pays for running the schemes and adjudication. The landlord receives no interest. Under an insured scheme the landlord pays for insurance. Currently the DPS charges £18.75 for deposits under £500 and £27.75 for deposits of 500 or more.
With a deposit of £1000 the insurance cost is 2.775% which is more than half the alleged income for the first year. When the RRB becomes law you might pay the insurance and the tenant leaves after 2 or 3 months so it costs the landlord money. What might happen is that more landlords use the custodial schemes so no interest at all will be earned by them.
Member Since January 2021 - Comments: 52
11:23 AM, 28th July 2025, About 9 months ago
Saw the following post on Money saving expert forum (albeit quite a long time ago in 2014) but it certainly is food for thought. Bearing in mind the Govt clearly favour big business and BTR I cannot see how they will set up anything in favour of a tenant rather than benefitting big business….
Post is as follows….
“What is going on with this Deposit Protection Service malarky? I remember when it was launched in 2007 there was a big fanfare about the fact that one of the benefits for the tenant was that it would stop landlords investing and making interest on money that wasn’t really theirs. It even went on to say that the tenant would even be paid interest on their deposit while it was in the scheme. Figures like ‘2.32% below the Bank of England Base Rate’ were quoted. http://www.depositprotection.com/documents/newsletter-4.html
However, it seems the DPS have 180 degree reversed that decision, and apparently the Communities and Local Government organisation which licences the DPS to undertake this work have more recently changed the terms of the contract, so that the DPS are no longer obliged to pay any interest payments to anyone! See: https://www.depositprotection.com/help/browse/custodial/tenant/interest-payments
Now, by their own claims, the DPS is holding ‘billions’ of pounds of tenants deposits (can’t get an exact figure). It’s almost impossible for any organisation to be sitting on billions of pounds and it not be ‘making money’ in some way. Even if it was the 0.9% I get on my rock bottom basic savings account, it would be making £9 MILLION a year on each billion. In reality I suspect this money is being invested in much more lucrative bonds and long term investment, so you can realistically say the DPS is making around £50 MILLION a year on each billion of our deposits they hold.
So, if it is no longer paying the interest to tenants…. where is it going?
The Deposit Protection Service is actually owned by an investment banking firm, Computershare. They will have significant running costs managing all those deposits, as well as arbitration for disputes etc, but what about the ‘left overs’? Have we gone from a situation where landlords were making money on tenants’ deposits, to where fat-cat bankers are making money on tenants’ deposits?”
Member Since May 2014 - Comments: 147
11:29 AM, 28th July 2025, About 9 months ago
Blame your government, Gen Rent, it was their idea to collect bonds into 2/3 observable online positions. Don`t balme landlords as you are in the habit of doing. Gen Rent need to inform themselves better instead of their conatant kneejerk reactions to landlords, grow up.
Member Since September 2018 - Comments: 3511 - Articles: 5
11:35 AM, 28th July 2025, About 9 months ago
LL’s don’t receive any interest!
LL’s PAY to use the insurance option!
Member Since October 2024 - Comments: 11
2:04 PM, 28th July 2025, About 9 months ago
This is GR making a lot of noise to justify their existence but in truth this is a complete non-story. Say for an average deposit of £1,750
It would have to be invested safely, so 1.25% below BBR = 3%.
The average tenant would receive £52.50 minus scheme running costs.
Today, they will be lucky to get anything more than a tenner back.
And would have had to pay for the service when the interest rates were lower.
Member Since May 2023 - Comments: 224
4:48 PM, 28th July 2025, About 9 months ago
More GR ignorance and delusion.
Member Since December 2023 - Comments: 1574
9:47 PM, 28th July 2025, About 9 months ago
I stopped taking deposits when the tenancy deposit rules came in.
Now, I’ve stopped taking tenants.
I had hoped to never need to evict my tenants however, ranting by Generation Rent (Generation Inherit?) and Shelter, only serve to push me towards fast forwarding my exit from the PRS.
Keep it up and my tenants will be evicted.
Member Since December 2021 - Comments: 161
8:51 AM, 29th July 2025, About 9 months ago
Actually, deposit passporting sounds like it might be a good idea.
You can transfer the deposit directly to their new landlord on return of an acceptable property. Might motivate a few to clear out and clean.