Almost 300,000 landlords have failed to protect their tenants' deposits, totalling over £500 million of unprotected funds, according to a new study.
It is a legal requirement for landlords to place tenants' deposits into one of three government-approved deposit protection schemes within 30 days of receipt but financial comparison site money.co.uk says many landlords are not compliant.
The advice site commissioned the Centre for Economics and Business Research (Cebr) to carry out research into the extent of non-compliance.
Using data from the three schemes – The Dispute Service, The Deposit Protection Scheme and Mydeposits – the Cebr calculated that £514 million worth of tenants' deposits remain unprotected.
The study suggests that 15% of landlords have failed to protect deposits, and using the average protected deposit of £1,040, calculates that flouting landlords could be earning up to £8.5 million a year in interest on unprotected money.
money.co.uk urges renters to 'take control' and ask landlords which protection scheme their money will be stashed in before signing a tenancy agreement.
While many landlords are doing the right thing and protecting deposits in one of the official government backed schemes, a worrying amount of money is falling through the cracks and far too many tenants are being left vulnerable,” says Hannah Maundrell, Editor in Chief money.co.uk.
“It’s not right that tenants are left responsible for taking their landlord to court if their deposit hasn’t been protected. The government needs to step in and take decisive action. Introducing a compulsory register listing every landlord that rents out property in England and Wales would be a start. This works for Scotland and Northern Ireland and it seems crazy this hasn’t been brought in across the UK.”
“It’s not just renters that stand to benefit from deposits being protected; after all landlords need a safeguard against renters that misbehave too.”