A leading property campaigner has welcomed news that the government’s consultation into the banning of letting agent fees will also consider reforming how tenancy deposits are paid – as the total value of deposits known to be stolen in 2017 passes £300,000
Renting reformer Ajay Jagota keeps a running total of the cash value of deposits crooked letting agents have been convicted of stealing, which he publishes on a quarterly basis.
The recent conviction of Croydon agent Thirunga Damayantharan for illegally keeping £15,000 of tenancy deposits has taken the total value of deposits known to be stolen in the first quarter of 2017 to £310,000 – with the annual total on course to exceed the £1m recorded in 2016.
The Department of Communities and Local Government last week published a consultation document detailing its initial plans for the banning of letting agent fees, as announced by Chancellor Philip Hammond in last year’s Autumn Statement.
The document also stated ”the Government recognises that a deposit can be a significant amount of money for a tenant to find at the outset of a tenancy and in order to better support tenants to access and move around in the private rented sector, is keen to explore how this financial burden on tenants can be minimised”
Ajay Jagota, founder of Protech Deposit replacement insurance solution Dlighted, an alternative to the cash Tenancy Deposit schemes TDS, DPS and Mydeposits, and sales and lettings firm KIS welcomed the news.
He said: “The government’s announcement that deposit reform will form part of the letting agent fees ban consultation led to the usual flurry of outrage from the usual suspects – but the industry needs to accept that change is coming.
“It’s absolutely true that deposits are a financial burden on renters in need of minimising and it’s in the letting industry’s interest as much as anybody else’s that they are not only minimised but eliminated altogether. We exist to help landlords find and keep good tenants!
“No-one is saying that asset protection for landlords isn’t essential – we only look to research this week claiming that a third of tenants wouldn’t own up to damaging their rented property - but there are better ways of doing it, and replacing cash deposits with insurance policies is one.
“I can already see a path to a place where its costs agents money whenever they take a cash deposit. The chair of one of the tenancy deposit schemes seemed to be hinting in a recent interview that as ongoing low interest rates are making it harder to operate he wants to start charging for his services, You might think that will never happen, but a lot of people thought that a letting agent fee ban would never happen.
“Whether by legislation or technology, the sector is going to change. It is time to recognise the sectors associations who represent it have a poor track record of lobbying government and it is now time to embrace any opportunities from the forthcoming changes.”
Notes to editors
In a recent interview Steve Harriot Chief Executive of the Tenancy Deposit scheme (TDS) said:
“Custodial schemes aren’t currently permitted to charge a fee for deposit protection but in a period of low-interest rates, this is becoming very challenging……. we might see governments across the UK having to allow the custodial schemes to charge a modest fee for this service.”
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