LV reports renters money at risk as landlords fail to join tenancy
deposit scheme
Released
on: September 29, 2008, 8:57 am
Press Release Author: Emma Holyer
Industry:
Financial
Press
Release Summary: LV= research reveals £4 billion of renters
money may be at risk as landlords fail to sign up to government's
tenancy deposit scheme
Press
Release Body: New LV= research has revealed that
thousands of landlords have failed to join a tenancy deposit protection
scheme, leaving up to £4 billion of renters' deposits at
risk.
The
findings, from home insurer LV,
reveal that 29% of renters who have moved in the last 12 months
are not part of a tenancy deposit protection (TDP) scheme. Despite
this being a legal requirement for landlords to ensure tenants'
deposits are protected by the Government approved scheme.
Introduced
in April 2007, the TDP scheme was set up to ensure that tenants'
deposits are not wrongly withheld at the end of a tenancy. The
LV= research found that 48% of current renters are unaware
that such a scheme exists, and a further 24% said they had heard
of the scheme but didn't know any details of it.
All
rental properties where a deposit has been taken since April 2007
are legally covered by the scheme, yet among private renters just
27% said their landlord is signed up. This means thousands of
tenants could be at risk of having problems recovering their deposit,
with over 77% of renters stating they had previously had some
or all of their deposit money unreasonably withheld. The average
deposit taken by landlords in the last 12 months is £670,
so the potential loss is considerable.
To
counter this 13% of private renters surveyed said they had refused
to pay rent towards the end of their contract, because they expected
problems to arise with the return of their deposit.
Under
the TDP scheme, landlords must sign up with one of two schemes
run by three Government approved financial companies. In the 'custodial
scheme', the landlord pays the deposit to the scheme for safekeeping,
and in the event of a dispute independent adjudication will decide
who receives the deposit money.
In
the 'insurance scheme' the landlord retains the deposit and pays
a premium to an insurer, who will return the money to the tenant
if the landlord does not comply with the adjudicated outcome of
any dispute. With both schemes, landlords have 14 days from the
date the deposit is taken to inform their tenant of the scheme
details.
The
LV= survey also revealed that 40% of people living
in private rented accommodation don't have any home
contents insurance in place, despite the fact that rented
properties are more prone to being burgled. Also, of those that
do have home insurance, only 10% have a policy that includes a
legal advice helpline, which could be used in the event of a dispute
with a landlord.
John
O'Roarke, Managing Director of LV= home
insurance, said: "This research highlights the need
for the Government to raise the profile of this legislation and
for it to be more strictly enforced, to protect both renters and
landlords, as awareness is currently very low. Although the majority
of private landlords are undoubtedly honest, our research shows
that many tenants have experienced problems getting their deposit
money back in the past, and are worried this could happen again.
"The
average deposit is over £500, which is a significant amount
of money, so renters need to make sure they know their rights.
Renters should also always ensure they have home
contents insurance in place, as not only are they more likely
to be burgled than home owners but some polices will include a
legal advice helpline, which could be used in the event of a contractual
dispute."
Notes to Editors
The research was carried out on behalf of LV= by YouGov.
A nationally representative sample of 1193 private renters were
questioned online between 22nd to 25th July 2008. Results were
weighted to be representative of the UK adult population. YouGov
is a member of the British Polling Council.
Web
Site: http://www.lv.com
Contact
Details: LV= PR contact:
Emma Holyer
Press Office
LV=
69 Park Lane
Croydon
CR9 1BG
0208 256 6714
Emma.holyer@lv.com
2012
