Almost a third of renters unaware of their deposit rights

29 May 2013

Mother holding baby

Almost one in three renters are unaware of their rights under tenancy deposit protection schemes, new research from Shelter has found.

The schemes, which have been running since May 2012, prevent landlords from unfairly withholding tenants’ deposits.

The survey, conducted with over 4,000 private renters in England, also found that one in five don’t know if their deposit has been protected. Almost one in ten (nine per cent) know that their deposit is definitely not protected.

Housing Minister Mark Prisk said: ‘Tenancy deposit schemes offer vital protection for both tenants and landlords, giving them financial peace of mind and offering neutral help to resolve disputes.

‘In March alone, 2.6 million deposits were protected by Government-backed schemes, and over the last six years, more than 7 million deposits have been protected. But there’s always more to do to ensure that people know and exercise their rights, and I hope that, with Shelter’s help, even more tenants will know how to ensure their hard-earned cash is safe.’

Landlords who fail to place their tenants’ deposit in one of the government-authorised schemes within 30 days of receiving it can be taken to court. They could face a penalty of one to three times the value of the deposit, which is then awarded to the tenant.

The improved law helped Grace Pye, 75, from Cornwall, when she found out that her landlord had not protected her deposit. With Shelter’s support, Grace used this law and was successfully awarded two times the value of her deposit from her landlord.

Grace says, ‘Without having my deposit protected there was no way of knowing if I’d ever see that money again. Living on a small pension I would have found it impossible to afford another deposit if I had to move to a new place.’

Rising deposit costs (now averaging £992) are putting renters at greater financial risk, with seven per cent turning to credit such as payday loans to pay their deposits. It’s now more important than ever that deposits are not unfairly withheld.

Campbell Robb, chief executive at Shelter, said: ‘We hear from thousands of renters who have huge chunks deducted from their deposit for no good reason, or who have to wait months to get their money back.’

He added: ‘We campaigned for this change in the law to stop renters from losing money in unfair deposit deductions, so it’s extremely worrying that so many are still unaware of their tenancy deposit rights.’

Have you had an experience with your tenancy deposit? Tell us about it by tweeting @Shelter or using the hashtag #9millionrenters.

For advice about deposits, visit our pages on tenancy deposit protection schemes for renters and landlords.