Tenants across England are reaping the benefits of newly introduced legislation which is leading to an average deposit refund of £320.27 when agreeing a new rental contract.
The reimbursement is to do with the Tenant Fees Act 2019 which came into force on June 1, 2019.
Among many things, the new rules mean that security deposits are capped at a maximum of five weeks’ rent for tenancies with an annual rent of less than £50,000, or a maximum of six weeks’ rent for tenancies where the annual rent is £50,000 or more.
The law now states if a tenancy is renewed as a new fixed term agreement, the landlord or agent is obliged to return any part of the deposit which then exceeds the deposit cap.
Tenancy Deposit Scheme (TDS) is the only tenancy deposit protection scheme to have an online solution to facilitate the deposit cap refund process. The organisation used its data to work out how private renters have benefitted and has found that on average, tenants have received a refund of £320.
Debbie Davies, Assistant Director of Business Development at TDS, said: “We reviewed data from when the legislation was first introduced in order to establish how frequently deposits are being partially repaid by agents or landlords.
“During this period we have made 2,550 repayments totalling £817,031.33. From delving deeper into the figures we identified the average payment was £320.27 and the highest repayment to a tenant was £3,384.62.
“We believe the deposit cap is having the effect intended by Parliament, with the deposit held being reduced upon renewal, which is great news for renters.”
TDS has also reviewed the data set on TDS Custodial Deposit Repayments, these repayments are made when an agent or landlord reaches an agreement with a tenant over how the rental deposit is to be distributed.
The data shows that the average agreed deposit deduction is £303.59 and in six per cent of cases tenants agree to their full deposit being repaid to the landlord.
A total of 43 per cent of tenants agree to some deduction from their deposit and rent arrears and cleaning are among the most common reason for deposit deductions.
Tenancy Deposit Scheme (TDS) is a Government-approved tenancy deposit protection scheme.
It is the only not-for-profit tenancy deposit scheme in the UK, which means it continuously invests surpluses into raising industry standards with excellent service levels, quicker call response times, user-friendly technology and faster tenancy dispute resolutions.
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