Government consider introducing tenant deposit passporting

Secretary of State for Housing James Brokenshire is considering a national rental deposit passporting scheme that would enable tenants to transfer their rental deposit between letting agents or landlords as they move from one address to another.

The proposals, which were revealed at the Chartered Institute of Housing’s annual conference in Manchester, are part of the government’s ongoing attempts to make the private rental sector fairer and more transparent.

Ministers believe deposit passporting would solve the long-standing problem of tenants who have to find substantial sums to pay the deposit on their next home while waiting for their old one back.

DEPOSIT PASSPORTING

But Savills has questioned the plans, saying that if a deposit is passed to the next landlord before any money owed for dilapidations have been agreed, it “offers no protection to the existing landlord, which obviously negates its purpose”.

Tenants in dispute with their old landlord would have any contested sums held back from their deposit, and they would then have to top up the difference to ‘passport’.

Mr Brokenshire told the conference that his officials were looking at whether a passporting system would be government-run or operated by the existing deposit protection organisations.

“Sometimes the barrier to people moving can be the fact that someone’s got one private rental and they want to move, and the time period between the release of the first deposit, and then the deposit that’s needed on the second property,” Brokenshire told The Times

“We need to do this thoughtfully, which is why I’m not rushing into this.”

Rob Wellstead of Lenwell Property Services says "Landlords require the certainty of a full deposit when a tenant vacates. Passporting will effectively be taking this certainty away at the exact time when a landlord requires it!! I really hope ministers will see sense and decide against introducing such a ridiculous scheme."

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