Deposit protection up along with deposit values

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Steve HarriottData just released by the Government shows the continuing success of tenancy deposit protection in England and Wales with the three approved schemes showing an increase in deposits protected to a total of 2,659,301 at 31 March 2013: an increase of 284,916 from a year earlier.  This seems to reflect both the continuing growth in the number of homes privately rented in England and Wales and also the increasing attention being paid by the media and interest groups on tenancy deposits and other lettings issues.  In addition the amendments to the legislation in the 2012 Localism Act closed some loopholes in the legislation and also raised the profile of deposit protection.  However there are continuing reports that a small minority of landlords and agents are not fully complying with the requirement to protect deposits within 30 days of their receipt.

In terms of deposits themselves there is evidence that in 2012-13 the average value of deposits (both custodial and insurance backed) taken in England and Wales has increased with the average deposit now worth £992 (with deposits held by the Tenancy Deposit Scheme slightly higher at £1,149).  In Scotland (where custodial deposit protection was introduced in July 2012) average deposit values are lower at £671 and in the first month of the new Tenancy Deposit Scheme in Northern Ireland the deposits taken by the Scheme (both custodial and insurance backed) have averaged £558.  This disparity in deposit values across the UK reflects the differential rent levels across the UK with deposits typically being between 4-6 weeks rent.

TDS will continue to publish deposits data on an on-going basis to show how these values change.  The chart below shows that following a big fall in average deposit values in April 2010 deposit values have increased with a further increase over the last 12 months from £979 to £992 over 12 months.  Deposit values are clearly linked to rent levels and as rent levels increase new deposits will reflect this with the average deposit value set to increase further over 2013-14.

Average deposit values


Posted by Steve Harriott, CEO on 20 May 2013

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