The government has parked proposals for rental deposit passports or ‘lifetime deposits’ after a lack of enthusiasm from landlords, tenants and letting agents, despite it being a ‘government priority’ three years ago.
Its call for evidence on tenancy deposit reform asked whether the Department for Levelling Up, Housing and Communities (DLUHC) should continue to explore ‘passporting’ part of renters’ deposits before the end of their old tenancy.
Of those surveyed, 53% said it shouldn’t, mainly because they believed damage could be hidden until the tenant had left and deductions couldn’t be calculated before leaving, or they thought it would increase risk for landlords, and take too long.
Those in favour believed passports would speed the process up, remove the need for a second deposit and make the moving process easier for tenants.
However, while most (70%) agreed that passporting would lead to a change in landlord and tenant behaviour, when asked what measures could be put in place to tackle or prevent negative behaviour, the largest response (42%) suggested not putting passporting in place altogether.
Too slow
Perhaps not surprisingly, most tenants (90%) agreed that the process for returning a deposit is too slow whereas the majority of individual landlords disagreed (54%) or neither agreed nor disagreed (26%).
Other proposals included paying in instalments, financial education for tenants, and the creation of an insurance deposit product and deposit replacement products.
Read more about deposits.
In its report, the DLUHC said: “The market has evolved since the call for evidence and has begun to develop innovative solutions to affordability issues, for example, loan and insurance products to bridge the period a tenant has a period where deposit requirements overlap. Private solutions have the potential to offer innovative and flexible solutions for different groups.”
Instead, it plans to monitor these solutions, including their affordability and accessibility, and to explore the findings with the Tenancy Deposit Protection Working Group, made up of deposit protection experts and tenant, landlord, and student industry bodies.
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