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Tenancy deposit shake up

March 6, 2007 by admin  
Filed under News, News-Mortgages

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A new scheme is being introduced which could change the face of property renting in England and Wales.

From April 6th many landlords will be required to protect the deposits of tenants by putting the money in one of three schemes.

The move has been made after homeless charity Shelter warned that too many people are not getting their money back with the landlord failing to provide a good reason.

With the average deposit now sitting at around £700, the withholding of the money can cause serious financial hardship for many and can leave people unable to get a mortgage, or forced to get a loan just to pay another deposit on a rented property.

“This money represents a sizeable chunk of cash for many tenants and losing it unfairly not only leaves thousands of people out of pocket but can lead to homelessness,” said Adam Sampson, chief executive of Shelter.

“The tenancy deposit protection schemes provide a vital safety net for both tenants and responsible landlords, making the private rental sector more professional and fairer for everyone.”

One of the available schemes will physically hold the deposits until the tenancy agreement reaches its conclusion, while the other two will provide insurance cover if a landlord does not return the money.

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