Why deposit reform is so badly needed
Mary-Anne Bowring 31/10/2019
2508
The Urgent Need for Deposit Reform
The average rental deposit costs tenants around £1,110, often requiring them to pay a second deposit before recovering the first. This financial strain makes moving increasingly difficult for renters, leaving many in a difficult financial position.
The Financial Burden on Renters
A report by Which reveals that nearly half of renters have to borrow money to cover their new deposit. Whether through credit cards, loans, overdrafts, or borrowing from friends and family, renters are struggling to meet deposit demands. With over £4bn locked up in deposits across England and Wales, it’s clear that urgent reform is needed.
Government Acknowledgment and Possible Solutions
The government has now acknowledged the issue and recently published a call for evidence. Property experts are advocating for tech-driven solutions, including tax incentives for landlords who adopt alternative deposit schemes, a central clearing system for tenancy transactions, and an independent adjudicator for resolving deposit disputes.
How Ringley is Helping Tenants and Landlords
With over 25 years of experience in property management, Ringley developed PlanetRent to streamline the rental process. The platform enables deposit-free renting, allowing tenants to pay just one week’s rent as an alternative deposit while ensuring landlords receive up to eight weeks’ rent coverage.
The Case for a Tenant Database and Single Adjudicator
Ringley supports the idea of a government-backed database listing tenants who have lost deposit adjudications. Additionally, having a single independent adjudicator to resolve disputes would align private landlords with letting agents who already comply with extensive regulations.
Balancing Reform with Fairness for All
While tax incentives for landlords adopting deposit alternatives could be beneficial, the challenge is ensuring fairness for responsible tenants who would typically get their full deposit refunded. Furthermore, a central clearing system for tenancy transactions could be seen as a way to track undeclared rental income, which may make some landlords hesitant to support the reform. This structure makes the blog more engaging and easier to navigate. Let me know if you’d like any tweaks!
Planetrent Properties
info@planetrent.co.uk
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