The housing sector has been challenged to make a new voluntary system work, or see regulation.Private tenants who face problems getting their deposit back at the end of their tenancy will be the beneficiaries of a voluntary rent deposit scheme to hold the money in third-party safe-keeping. Organisations representing landlords and tenants are being invited to set the scheme up.
Housing Minister Hilary Armstrong said: “Landlords often charge tenants a deposit to cover themselves against possible damage to the property or non-payment of rent. But there are often disputes at the end of the tenancy about what should happen to the money. And too many landlords refuse to give it back for no good reason.
“Some countries have compulsory schemes under which an independent third party holds the deposit during the tenancy and decides whether the landlord should be given any of it at the end. There is much to recommend such schemes.
“But before considering a similar arrangement in England, which would need legislation and entail some bureaucracy, I want to see whether we could achieve the same sort of results by voluntary means.”