Rental deposit loan scheme launched for tenants

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We don’t normally go to the supermarket to find out about the latest developments in the private rented sector.

But today Housing Minister Brandon Lewis, the Greater London Authority, and Shelter came together at a local Co-op store to launch the supermarket’s rental deposit loan scheme. It was piloted by GLA and Shelter in London last year, and they have now signed up several employers including the Co-op and the Civil Service to give interest free loans to their employees to pay the ever growing tenancy deposits.

TDS is fully behind the new scheme – and we are one of the organisations setting the wheels to look at how we might offer this to our own staff!

The benefits for employees are clear. The private rented sector is the only form of tenure still growing and rents – and inevitably deposits – are predicted to continue growing in 2015. A full month’s rent in advance, four or six weeks rent as a deposit, letting agents fees and the other costs of moving home can make it a financially challenging task.

But apart from the immediate financial support for tenants, the scheme will also be a boost for awareness of tenancy deposit protection, both amongst tenants and landlords, which is an ongoing challenge. It’s a small but significant requirement in Shelter’s employer guide to the scheme that tenants give proof to their employer that their deposit has been protected in a government approved scheme such as TDS.

What this brings to the table is positive action by the tenant to get proof that their deposit has been protected.  This is meant to protect the employer against misuse of the loan. But it is an important, if unintended benefit, to require tenants to be certain that their deposit is protected.

In too many cases tenants don’t know what should happen to their deposit until it’s too late. The unscrupulous landlords who fail to protect deposits may well go on to misuse them. The ‘what ifs’ of moving out some time in the future are too easily pushed down the list of things to worry about when moving in.

Posted by on 3 February 2015

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