There’s a call for the government to decide what to do with £750m sitting unclaimed in the tenancy deposit system.
The figure is calculated by The Letting Partnership using publicly available data – it has to be a calculation because there is no official or consolidated record showing the value of deposits that remain unreturned after tenancies have ended.
The partnership stresses that the estimate does not suggest any tenancy deposit schemes or letting agents have acted improperly.
Rather, it highlights what it believes is a significant policy gap, with no clear legislative framework defining when a tenancy deposit becomes dormant or determining how genuinely unclaimed funds should ultimately be treated.
Unlike England and Wales, Scotland has already legislated for dormant tenancy deposits, establishing a process that allows eligible unclaimed funds to be directed towards housing-related causes after appropriate safeguards and timeframes have been met.
The Letting Partnership believes ongoing tenancy deposit reform presents an opportunity to consider whether a similar framework should be introduced in England and Wales.
It believes this would bring greater transparency to the treatment of long-term unclaimed balances while providing certainty for tenants, agents, landlords, and deposit protection providers.
According to the business, the absence of any official figure means policymakers and the industry are currently debating the future structure of tenancy deposit protection without fully understanding the scale of dormant funds already sitting within the system.
Chief Operating Officer Chris Mason says: “The tenancy deposit reform debate has understandably focused on how deposits should be protected in the future, but there is a wider governance question that also deserves attention.
“At present, there is no legislative framework in England and Wales governing dormant tenancy deposits, nor is there any official reporting mechanism that reconciles deposits held within the protection schemes against those that remain active within letting agents’ portfolios.
“That means there is no clear picture of how many deposits may simply be sitting within the system after tenancies have ended.
“Our modelling suggests the figure could be significant, potentially running into the hundreds of millions of pounds, but without that reconciliation mechanism in place, nobody can say with confidence what the true scale actually is.
“Our analysis is an attempt to start that conversation.
“Before deciding how the system should operate in the future, it’s important to understand the one we already have and whether there is an opportunity to bring greater transparency to balances that may otherwise go unnoticed.”
