One in five private renters facing unreasonable deposit deductions at the end of their tenancy benefit from the deposit protection system, according to research by Generation Rent.
The study showed that challenging landlord deductions through a deposit protection scheme tends to pay off, as two in three tenants who disputed their landlord’s claims received more money back than initially offered.
However, a lack of trust in the deposit protection system and concerns about landlord behaviour discouraged tenants from exercising their rights.
Generation Rent is urging the government and deposit schemes to make the system clearer and more reliable to restore tenant confidence.
The research surveyed 1,021 private renters in England between January and March 2024, asking about their deposit experiences at the end of their last tenancy.
Most renters (58%) received their full deposit back, while 10% felt the deductions made by landlords were reasonable. Yet, 26% of respondents faced issues in retrieving their deposits.
Of those, only 1 in 5 (5% of the total) raised a dispute. Others opted for different routes: 8% negotiated with the landlord, 8% encountered refusals for deposit returns, 4% did not request their deposits back, and 1% took legal action.
Landlords are legally required to protect tenants’ deposits in one of three accredited schemes.
Tenants can dispute unreturned deposits, but landlords can refuse, leaving tenants with the option of pursuing the issue through the courts.
Respondents who did not dispute deductions identified several reasons, including 26% who were unaware of their rights, 23% believing the dispute process would be unfair, and others citing concerns about the time it would take or not having sufficient evidence.
Among those who did raise disputes, nearly two-thirds (62%) ended up receiving more money than what the landlord initially offered, while 24% received about the same amount, and 9% got less.
The remaining respondents were still awaiting outcomes or could not recall.
Dan Wilson Craw, deputy chief executive of Generation Rent, said: “Deposit protection should be one of the success stories of the English private rented sector, particularly as those who use the dispute process generally have positive outcomes.
“But there are too many holes in the system that either undermine tenants’ confidence in exercising their rights, or give unscrupulous landlords opportunities to hold on to more of their tenants’ money.
“As the new Government reviews provision of deposit protection, it can make small changes to build trust in the system among tenants, such as making sure undisputed cash is returned immediately, and that unscrupulous landlords can’t ignore requests or bully tenants into accepting less than they are entitled to.”
