The existing tenant deposit system is “broken” and in desperate need of reform after a new report revealed that one in six tenants are forced to wait for than four weeks to get their deposit back.
Many renters need to wait weeks for landlords to return money and are often forced to challenge deductions, resulting in 43% on average taking on debt through credit card, loan or overdraft, or borrowed money from family and friends, to cover the expense, according to the report from Which?.
The consumer group found that more than half of tenants who did not get their money back challenged the decision and 31% had to pay a new security deposit before having their previous one returned.
Cleaning remains the most common reason for a landlord to charge money at the end of the tenancy.
Which? is now called on the government to open up a review of the three approved deposit adjudication schemes operated by mydeposits, Deposit Protection Service (DPS) and the Tenancy Deposit Scheme (TDS).
The consumer group wants to see landlords forced to register with local authorities, with information logged on a publicly available database and linked to the existing register of rogue landlords and agents established in April 2018.
It is also calling for the creation of an independent regulator for lettings and management agents with a mandatory, legally binding code of practice and strong penalties for rogue operators.
Alex Neill, Which? managing director of home products and services, commented: “The number of people going into debt to cover the cost of a new deposit is concerning, particularly when you consider that many are forced to wait a significant time to get their previous one back, and could then face deductions that they don't think are reasonable.
“The findings highlight how the deposit system is crying out for reform so that it is fit for purpose for the record numbers of people who are living in rented accommodation.
“We believe that the government must tackle the issues that we have identified in our report head on to ensure that the rental market delivers for consumers.”