Landlords say tenancy deposit schemes are failing
Tuesday 10th April 2012
Only one in five agents and not one single landlord believes that tenancy deposit schemes have been designed in their favour.
But while most believe that the schemes are stacked in favour of tenants, fewer than half of tenants even knew that the schemes exist or whether their deposits had been protected.
The findings emerge from a new survey of landlords, agents and tenants by digital inventory provider Imfuna.
It found that while a startling zero per cent of landlords said they felt that deposit schemes are designed in their favour, 35% claimed that neither they nor their tenants benefited from the schemes.
Letting agents also largely mirrored that sentiment: only 20% said the schemes favoured landlords and 52% said the balance has been tipped in favour of tenants. A further 22% felt that the schemes benefit ‘neither’ party.
The statistics have emerged after new parts of the Localism Act came into effect on April 6. The new Act means all landlords now face large fines of up to three times the deposit if it is not registered correctly within 30 days, and the prescribed information not given.
Imfuna creator Jax Kneppers said: “The survey presents a picture of landlord disenchantment with the deposit schemes.
“The fact that not a single landlord surveyed felt they were designed in their favour, shows that there is still some work to be done by all parties in order to democratise the inventory process and ensure that everyone involved feels they are supported in equal measure.”
Overall awareness of the deposit schemes was found to be high among landlords (99%) and lettings agents (88%). Tenant awareness levels were much lower, however, and only 43% were aware of the schemes before their tenancy began.
This lack of knowledge translated into the take-up of the schemes: nearly half (49%) of the tenants surveyed claimed they have not taken part in a deposit scheme.
While the schemes make much of their dispute resolution services, just 37% of landlords, compared to 78% of tenants, believe deposit schemes are an effective tool for minimising conflict.
Kneppers said the finding that only 19% of landlords and 36% of letting agents believe deposit schemes reduce the time taken over disputes, indicates that the process still isn’t working.
Nearly half of letting agents (48%) and 30% of landlords reported that they have settled individual disputes privately, without the aid of a deposit scheme.
The survey was based on telephone interviews with 1,000 tenants, 100 landlords (owning 20-plus properties or more) and 50 letting agents during February.
* What do you think about deposit protection services? What is best practice when it comes to inventories? The topics will be hotly debated at the Property Business Show next week – the brand new national event. Landlords are welcome to attend, at no cost.
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