Latest News

Scottish Energy Efficiency PRS Regulations now approved

26 February 2020

Ministers have approved The Energy Efficiency (Private Rented Property) (Scotland) Regulations 2019 which will come into force on 1 April 2020 and will prescribe a minimum level of energy efficiency from 1 October 2020 for homes in the Scottish Private Rented Sector (PRS). Read More...

More tenants than ever seek housing as rental stock dwindles

25 February 2020

ARLA Propertymark’s Private Rented Sector (PRS) report shows that the demand for rental accommodation has reached a record high in January, with an average of 88 prospective tenants registered per member branch. Read More...

No change to Right to Rent despite new UK points-based system

21 February 2020

The UK Government has announced that from 1 January 2021, free movement will end, and they will introduce the UK’s Points-Based System but they are still no closer to confirming plans for the future of Right to Rent checks after Britain leaves the EU. Read More...

Custodial or Insured, which scheme comes out on top?

17 February 2020

Propertymark Industry Supplier, Tenancy Deposit Scheme (TDS) reveal the most popular type of tenancy deposit protection scheme. Read More...

What we need to know about Lifetime Deposit and Passporting

Wednesday 22 January 2020

Fixflo, repair reporting software provider and Propertymark Industry Supplier looks at the Government’s plan to regulate and rejuvenate the rental market.

As part of its plan to regulate and rejuvenate the rental market, the government is developing a plan to revolutionise how tenancy deposits work in the private rented sector, allowing tenants to move more freely.

One of the concepts being formulated as part of the Renters’ Reform Bill is to replace these individual deposits with a lifetime deposit, which can be moved from property to property; a move that is likely to be welcomed by both tenants and landlords. But how would it work in practice?

The current system

While the current system has faced a wealth of changes over the years (including the introduction of mandatory tenancy deposit protection and stipulations about the amount of rental income the deposit can be equivalent to), tenants are still expected to find over a month’s rent (an average £1,110 deposit across England and Wales) every time they move. Inability to find these additional funds is a huge drawback of the current system as it slows the market right down; something which introducing a lifetime deposit could easily solve.  

The Residential Landlords’ Association has long called for such a change, arguing: “It would be easier for all involved if a tenant’s deposit could follow them from property to property, with the tenant making up any shortfall caused by deductions.”

So how would a lifetime deposit scheme actually work?

Although the details are yet to be thrashed out (the idea, which was first mentioned in Boris Johnson’s election campaign and followed up in the Queen’s Speech is in its infancy), a tenant’s deposit would follow them around, from property to property, with the tenant liable to make up any shortcomings as a result of deductions.

One potential downside is how quickly any possible shortfall can be made up without disadvantaging either the outgoing landlord and incoming landlord. With this in mind, the Tenancy Deposit Protection Reform Working Group has been set up by the government, tasked with ways of making this passporting system of lifetime deposits conducive to the current market. But although the idea itself is radical, its implementation will likely be a gradual process. Parliamentary proceedings on the Renters’ Reform Bill are yet to begin, meaning that although passporting and lifetime deposits’ inclusion in both the government’s pre-election promises and the Queen’s speech can be seen as positive indications of the desire for change, reformation is still a long way off.

For more information on tenancy deposit protection, download The Ultimate Guide to Tenancy Deposit Protection here. The free guide for agents and landlords explores the following areas:

  • Insured vs. Custodial TDP Schemes
  • The TDP Schemes in England & Wales
  • How to Handle Deposits Lawfully
  • Case Law
  • How to Prepare for Future Disputes Over Deposits
  • The Requirements for ‘Prescribed Information’