A tenant advocacy organisation, Generation Rent, has submitted a petition with 17,000 signatures to Housing Secretary Angela Rayner. The petition calls for the abolition of insured deposit schemes, advocating instead for all deposits to be held in custodial-only arrangements.
Generation Rent argues that the current insured system allows landlords to retain deposits during dispute processes. This, they suggest, can pressure tenants to accept lower settlements rather than challenging deductions they believe are unfair.
Analysis by the organisation indicates that while tenants who formally dispute deposit deductions recover an average of 79% of their deposit, only one in five renters facing contested deductions actually raise formal disputes. Many are reportedly deterred by anticipated delays or uncertainty regarding their legal rights.
The petition proposes that custodial schemes would release undisputed funds to tenants while any adjudication takes place. Under the current insured model, landlords maintain control of deposit funds until disputes are resolved. Generation Rent also suggests penalties for landlords whose claims are repeatedly rejected by deposit protection schemes.
The Government has previously indicated it is considering reforms to the rental sector, including potential changes to deposit protection arrangements. Current contracts with deposit scheme providers are set to expire in 2028.