The UK's tenancy deposit schemes are set for a major overhaul, with the government vowing to deliver better value and transparency in the re-procurement of these services. Contracts for the current approved schemes expire in March 2028, prompting preparations for the changeover that will take effect from April 1.
Housing Minister Matthew Pennycook has outlined the government's strategy in response to a parliamentary question from Labour MP Damien Egan, stating that the re-procurement process will focus on securing significant improvements in value for money and overall performance. Recent extensions to existing Tenancy Deposit Scheme contracts have introduced enhanced financial transparency and more rigorous Key Performance Indicators, resulting in service improvements and the creation of a Social Value fund.
Mr Pennycook stressed that ongoing scrutiny of supplier financial performance, revenue and cost data transparency, and the ability to challenge performance are crucial for delivering strong outcomes. The upcoming re-procurement aims to guarantee both good value for users and a transparent system, he added.
The Dispute Service (TDS), one of the largest UK providers in this sector, has confirmed its intention to bid for the new contracts. With 23 years of experience in deposit protection and dispute resolution, TDS anticipates a smooth transition to the new regime, which will be implemented from April 1, 2028.
Landlords must place a tenant's deposit in a government-approved scheme under UK law, with this requirement linked to their ability to regain possession of a property. The Ministry of Housing, Communities and Local Government has clarified that courts can award possession if the deposit was protected, returned, or properly stored according to court process. Unpaid rent or bills are still subject to valid deductions from the deposit.