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Get Lifetime Deposits done!

Steve Harriott, CEO of the Tenancy Deposit Scheme gives his thoughts on deposit replacement, as well as the wider issues facing the whole deposit market.

Steve Harriott

Link to Lifetime Deposits feature

TDS is the longest running deposit protection scheme (operating a voluntary scheme from 2003 before the statutory requirement started in 2007). TDS also carries out adjudications for Zero Deposit, a leading deposit replacement insurance company.

Link to Lifetime Deposits feature

Steve Harriott, TDS

There are over four million deposits protected in England and Wales; it’s likely that the number of deposit replacement products sold to date is below 50,000 so cash deposits still look like an enduring feature of the current market.

The introduction of deposit replacement insurance coincided with the concerns expressed by tenants’ groups, Shelter and Generation Rent about the costs faced by tenants in renting. This directly led to the Government’s decision in June 2019 to reduce tenants’ fees and cap most deposits at five weeks’ rent.

Objectives and solutions

The key objective of deposit replacement was to provide a solution which took away the need for an upfront deposit and replace it with, typically, a one off non-returnable fee of a week’s rent but with the tenant still legally responsible for any loss or damage at the end of the tenancy. At the time these schemes were launched there were already anxieties expressed about the potential for mis-selling of these policies and in recent months we have seen the BBC, CAB and others report on allegations of mis-selling, with tenants advising that in some cases they were unaware that they remained liable for costs incurred. In addition, there are also concerns that not all schemes are FCA regulated, so what happens to the insurance protection if they go bust? Similarly, some schemes are charging fees to tenants to raise a dispute. (This is also why TDS decided to work with Zero Deposit; it is fully FCA regulated with strong controls to prevent mis-selling and does not charge fees for disputes).

Lifetime deposits

However, I am now much more exercised by the Government’s promise in the Queen’s Speech to introduce Lifetime Deposits in England. You won’t find much detail about this proposal anywhere and that’s because the detail has not yet been worked up.

At its heart, Lifetime Deposits is a fantastic political idea, designed to appeal to those renters who have to find another deposit whilst they move to a new property. The Government wants to avoid the need for renters to pay for two deposits and thinks the solution is to allow a single, ‘Lifetime Deposit’ to ‘move with the tenant’.

A Lifetime Deposit is a fantastic idea, appealing to renters who must find another deposit when they move on.

For many commentators this is simply the ‘passporting’ concept: allowing the tenant to move into a new tenancy without a full deposit on the basis the deposit will be paid when the tenant receives it back from their previous landlord but with some form of insurance guarantee in the event of any shortfall.

All of this is very complicated but fundamentally I now don’t think that ‘passporting’ meets Boris Johnson’s vision of a Lifetime Deposit, so we all need now to think more radically to “get Lifetime Deposits done”.


So, here’s a shopping list of suggestions but how many of them pass the Lifetime deposit look and feel test?

  • A Government Help to Rent Deposit loan?
  • Short-term deposit replacement gap insurance?
  • Reducing deposits to 3 weeks allied with mandatory rent insurance paid by landlords?
  • Requiring all deposits to be paid by instalments over the first 5 months?
  • Requiring deposits to be delayed until month 3 of a tenancy?
  • Save as you rent levy to build up a deposit fund?
  • No deposit but with a levy to pay for mandatory ADR?

All ideas, but none of these looks like a ‘Lifetime Deposit’. TDS is now looking at a radical idea which puts the tenant in full control of their deposit, that can be used on two tenancies for a short time. It will however require changes to legislation.

We do need to develop a product that looks like a ‘Lifetime Deposit’’. The current cash deposit system, the complexities around passporting and the issues around deposit replacement solutions just do not look like a ‘Lifetime Deposit’.

If we can’t deliver a Lifetime Deposit, we should not be surprised if government simply decide to ban deposits: now that might win some votes!


  1. “…… but with the tenant still legally responsible for any loss or damage at the end of the tenancy.”

    Pointless if the tenant has no assets and is on benefits. Taking them to Court might get you £5 a week for the next 20years!!!!

    The tenant has to have “skin in the game” i.e. a Deposit that is at risk if they fail to behave. A rogue tenant won’t pay anything once they’ve got the keys to a property.

  2. Publishing that Landlords ( or rather, the NRLA ! ) back the scheme is no Reassurance for landlords, majority of whom have No trust that the NRLA are working in their interests, but for some unknown reason – are ‘ in-bed’ with the government.

    You never hear NRLA campaigning for parity between tenants and landlords, such as ;;
    Rogue Tenants database.
    Fines and Civil Penalties for tenants who breach their Tenancy agreements ( now there’s a novel idea ! )
    Regulation is One – sided, to appease the Lefty ( and increasingly, ) Tory Wokes !

    • “Fines and Civil Penalties for tenants who breach their Tenancy agreements”
      Chris I like your sense of humour.

      By some magic, best known to politicians, the rental sector of society organises itself into two groups, Landlords all of whom are bad and ‘Butter wouldn’t melt in their mouth’ Tenants. Since there are no bad tenants there is obviously no need for any such penalties!

      In any case with the penalties continually being imposed on landlords they are a fast disappearing sector with the tenants disappearing at an even faster rate reducing the need for lifetime deposits.

      The demise of the High Street leads to fewer shop doorways for the resulting rough sleepers. Never mind to paraphrase the words of one eminent politician “They now know where to find the food banks and park benches.”

      Bring back Heather Wheeler, she knows how to end rough sleeping – if only she had stayed in post.

  3. I see that the TDS people have had a draw on the “Whacky baccy”.

    Unless they are demanding only those people destined for sainthood should be tenants, they have zero experience of dealing with members of the public.

    Most tenants do hand their property back in reasonable condition.

    The minority who make deposit insurance a money losing scheme will be the problem.

    Unless people have a personal financial risk that will hurt, why bother?

    Reducing deposits to 3 weeks is insane. Why bother tiding up. The most we will lose is 3 weeks rent.

    If we stop paying the rent, we do not have to pay the deposit either. It will take the landlord 6 months to get us to court.

    Lets flit from house to house, every 3 months as we will have no financial risk.

    Save as you rent is fine, if you pay the rent, that is why this is flawed.

    No deposit but a levy to pay for ADR. The tenant can obviscate until everyone gets bored and “Lets them off”.

    The reason why landlords ask for a deposit is to ensure that the tenant has some money at stake so they will return the property in a reasonable condition.

    If this is pushed through I want to hire a car with no financial risk to me, even if I wrapped it around a lamp post.

    That will not happen, so why should renting a house be different to any other rental agreement?

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