Tenants earning £2.5m in interest through deposit scheme

14 2008
Tenants across England and Wales are set to benefit from interest worth a total of £2.5 million thanks to the recently-introduced tenancy deposit scheme (DPS).

Under the government-led initiative, every deposit-taking landlord has been putting the money they receive into either a custodial or an insurance based scheme, since April.

Unlike the previous system where the landlord looked after the tenant's money, now renters are able to gain interest on their deposits, meaning thousands could get a little extra back when their contracts come to an end.

"Prior to the new legislation, it was very rare for tenants to receive any interest on their deposits," explained Kevin Firth, client services director for the DPS.

"Many landlords and tenants were left out of pocket by either rogue landlords failing to return deposits or rogue tenants disappearing leaving unpaid rent. The DPS guarantees to return the deposit to the person entitled to it, which is a win-win for everybody in the rental sect."

He added, however, that the DPS has "anecdotal evidence" that many landlords are still failing to stick to the new rules, thereby putting the deposits of their tenants at risk. ADNFCR-1219-ID-18549966-ADNFCR

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