Generation Rent has accused landlords and letting agents of exploiting the deposit protection system to hold onto tenants’ money and is demanding the Government take action against those who make inflated claims.

Writing in The Big Issue, Dan Wilson Craw (pictured), Deputy Chief Executive of Generation Rent, said: “The structure of the protection system makes it easier for greedy landlords and letting agents to cling on to as much of their tenant’s money as they can.”

The pressure group estimates that 296,000 tenanted households lose out on hundreds of pounds each year because landlords and agents hold onto deposit money, with renters discouraged from challenging deductions.

The system makes it easier for greedy landlords and letting agents to cling on to as much of their tenant’s money as they can.”

It adds that one in four renters faced unreasonable deductions at the end of their last tenancy, but only one in five formally challenged them through a deposit protection scheme.

Tenants who challenged deductions recovered an average of 79% of their deposit, with only one in three getting all of it back.

Deposit claims

Wilson Craw said tenants who need their money back quickly after moving home can be pressured into accepting deductions.

In extreme cases, landlords can delay matters until “it’s too late to raise a formal dispute, and the landlord pockets it all”.

The campaign group’s intervention comes as ministers review the future of tenancy deposit protection schemes, including proposals that could see insurance-backed schemes replaced by a single custodial system.

Generation Rent is urging the Government to use the review to crack down on unfair deposit claims and says it should “penalise landlords who repeatedly make exaggerated claims that are rejected by the dispute process”.