A Picture of the Rented Sector
Since their introduction in the Housing Act of 2004
tenancy deposit schemes have been a huge success. Details of the amount of funds lying in the deposit schemes and the extent of disputes that the schemes have provided settlement over give an interesting
picture of the rented sector. Tenancy deposit schemes were introduced to provide an independent dispute
resolution service for landlords and tenants to call upon.
The system is simple – the tenant must pay a deposit which the landlord then leaves with one of the schemes recognised by the Government. The landlord informs the tenant of which scheme they utilise, and come the end of the tenancy funds from the deposit are removed in the case of damage to the property. In the event of a dispute between the two parties there is recourse to the independent arbitration of the scheme, with the deposit not being released to either party until resolution has been reached.
The Housing Act of 2004 required all landlords and letting agents who took deposits from tenants for short hold tenancies to be members of a tenancy deposit scheme. There are three such schemes recognised by the Government – the Deposit Protection Service (DPS), The Dispute Service (TDS), and MyDeposits.
Figures released by the Department for Communities and Local Government that document the amount
protected by each scheme show that The Dispute Service across England and Wales holds over £340 million more than any other of the deposit schemes. TDS protects well over £1.2 billion, MyDeposits nearly £700
million, and DPS over £900 million in custodial deposits and £12 million in insured deposits. TDS also provides protection to 75 per cent of the rental market in Northern Ireland.
Perhaps the most interesting statistic to emerge from the Departmental report records the amount of disputes between landlords and tenants once the deposits have been handed over to one of the schemes. The dispute rate surrounding deposits held by TDS in England and Wales is less than one in a hundred – just 0.87 per cent of deposits placed with the scheme resulted in a dispute. In total this amounted to 9,500 disputes across the 2013/2014 period, which on average concerned sums of £840.
Of these disputes there was no obvious trend for either officious landlords trying to take advantage or lazy
tenants failing to take care of the property, with roughly half of cases being decided in favour of each group – 52.3 per cent in favour of tenants, 47.7 in favour of landlords. Of the reasons for the disputes almost all involved either cleaning or damage issues.