News from the Residential Property Investor, the bi-monthly magazine for RLA members other artilces from the October / November 03 issue RPI news archive

Deposit action urged - October / November 2003

Based on one-sided evidence, Shelter and Citizens Advice are calling for a mandatory national deposit scheme to be included in the Housing Bill.

Together they have launched a campaigning campaign that includes pre-printed campaign postcards to be sent to MPs by 'anyone who has ever had a deposit unreasonably withheld by their landlord or believes there should be a national deposit scheme'.

Based on the assumption that there are 2.21m private tenancies, 70 per cent are charged deposits averaging £510, Shelter and Citizens Advice estimate landlords hold about £790m in deposits at any one time 'without any form of statutory regulation'.

The two bodies claim that Government figures show that each year 127,000 tenants have difficulty in getting their money back and £20.1m of deposits are wrongfully withheld.

'The wrongful withholding of deposits is a particular problem for students. The National Union of Students and Shelter estimate that over 35,000 students risk having part or all of their deposit withheld unfairly this summer as they move to new accommodation, return home or leave the area for work'.

The report accepts tenants' suggestions that deposits have been unreasonably withheld without question and does not include landlords' views.

'Each year tens of thousands of people lose out to this scam and are often forced into crippling debt to pay the next deposit, a few even face the extreme outcome of homelessness', said Shelter's director of external affairs Ben Jackson. 'Yet frequently tenants simply accept this loss as one of the hazards of renting. The Government must protect the people who are being cheated out of their money'.

The report claims 'attempts to voluntarily regulate the holding and return of deposits have failed to adequately safeguard tenants' money', and calls for 'a single national deposit scheme operated by an independent third party'. If introduced it would be unlawful for landlords to charge deposits unless done so via the scheme.

However, it is conceded that 'there is a case for members of national, professional, self-regulating bodies that are bonded by insurance schemes to be exempt from this'.

Shelter and Citizens Advice claim widespread support for their campaign from 'a wide-ranging group of influential organisations' that include the Consumers Association, Association of Residential Letting Agents, and Local Government Association.
 

other artilces from the October / November 03 issue

• The news is...tenants can be ruthless too
• Leaseholders gain right of challenge
• In brief
• Rental demand moves ahead
• Deposit action urged
• Summer leaves insurers with that sinking feeling
• HMO properties go missing
• Mould warning
• Remortgaging to boost returns