Finance

Deposit 'Black Hole' swallowing billions of pounds

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30th January 2018
black hole

New research carried out among more than 2,000 UK adults by SPCE has revealed the challenges faced by Generation Rent when attempting to claim back their deposit.

The report found that 16% of UK renters claim their landlord or lettings agent has unfairly taken money from their tenancy deposit, with the figure rising to 25% for millennials (18-34) and 30% among university students.

2.34 million UK renters (16%) have wanted to challenge attempts by their landlord or agent to take money from their tenancy deposit, but did not know the legal course for doing so. 13% have lost money from a tenancy deposit due to damage done by one of their fellow housemates. 14% have lost some of their deposit due to problems that existed before they had moved into the property.

18% of UK renters have successfully challenged attempts from their landlord or lettings agent to take money from their tenancy deposit.

With the average UK rent now at a record £1,196 per month, new research commissioned by student lettings app SPCE has revealed just how common it is for UK renters to lose part, if not all, of their tenancy deposit. 

The independent survey of more than 2,000 UK adults found that 16% of UK adults renting a property claim their landlord or lettings agent has “unfairly” taken money from their tenancy deposit. Moreover, 13% of Generation Rent have wanted to challenge attempts by their landlord or lettings agent to take money from their tenancy deposit, but did not know the legal course for doing so – equating to 2.34 million people. It comes as industry statistics suggest that over a billion pounds is lost each year in tenancy deposits.

These findings reflect a wider industry issue concerning the challenges faced by private renters more generally. SPCE’s survey revealed that one in five (19%) UK renters have lost money from a tenancy deposit due to damages being incurred to the property during their time living in it, with this figure rising to 28% for millennials, and doubling to two in five (40%) for UK students.

When delving into the reasons why, the research found a significant proportion of Generation Rent were losing out on some, if not all, of their deposits due to circumstances beyond their control. One in eight (13%) tenants admitted losing money through a tenancy deposit due to damage that was done to the property by one of their fellow housemates, while 14% reported losing their deposit due to problems with the property that existed before they had moved into the house or flat.

Leon Ifayemi, CEO and co-founder of SPCE, commented on the findings: “With rent prices at record highs, the financial demands placed on tenants looking to secure a property has never been greater. The amount of money required upfront can be significantly high, and the risk of losing some of a deposit can cause notable financial stress to those attempting to move to another property.

More should be done to increase awareness of the frameworks in place for those seeking to challenge unfair attempts to take money from a tenancy deposit – this is a legal right that cannot be ignored, with students as well as young people generally clearly requiring greater support and education as to their tenant rights.”

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