Home » News » Lifetime deposits ‘not answer to tenant affordability issues’, say industry leaders
Regulation & Law

Lifetime deposits ‘not answer to tenant affordability issues’, say industry leaders

Representatives of Rightmove, Propertymark and the NRLA say government aims are laudable but lifetime deposits will be difficult to bring in.

Nigel Lewis

parliament lifetime deposits

Senior members of the property industry have given a thumbs down to the government’s plans to introduce ‘lifetime deposits’ within its renting reform White Paper due in the New Year.

During a recent industry gathering both David Cox, Valerie Bannister and Ben Beadle said that, although they understood why Ministers want to help some tenants move home more easily without having to find two deposits, plans for a ‘portable deposit’ scheme would not solve the problem.

Ben Beadle TDS Northern IrelandBen Beadle (pictured), Chief Executive of the NRLA, said his research showed 60% of tenants were able to afford two deposits when moving between rented homes, but that a solution for the remaining 40% ‘was out there already’.

Bannister, who is a regional representative of ARLA Propertymark, said its research showed few letting agents reported tenants struggling to pay for deposits.

“This may be because most of our membership don’t deal day-to-day with tenants experiencing severe financial difficulties,” she said.

“I remember when most councils used to operate bond schemes to enable tenants to move home without having to effectively have two deposits on the go, and I think resurrecting that system may be a better solution than lifetime deposits.”

Australian bonds

Link to news of the industry's movers and shakersCox (pictured), who is Rightmove’s Compliance Director, said he said the government-backed bond scheme operated in the Australian state of Victoria was the best model, but doubted whether the current UK government would ever adopt a similar scheme.

Cox also said an insurance-backed system would not work either because it would not be any cheaper than existing services such as those offered by Zero Deposit or Flatfair and therefore, “for tenants what would be the point of having a lifetime deposit?”, he said.

“In my view, the ship has sailed for lifetime deposits but the government is determined to bring them in nevertheless, as senior advisors in No.10 have told me, they still don’t really how it’s going to happen.”

December 23, 2021

What's your opinion?

Please note: This is a site for professional discussion. Comments will carry your full name and company.

This site uses Akismet to reduce spam. Learn how your comment data is processed.