Friday 28th June 2019

Renters could transfer deposit from one landlord to the next under new proposal

Tenants could be permitted to transfer rental deposits directly between landlords instead of having to pay up for their next property while waiting for a refund on the last under new plans being proposed by the government.

Ministers are considering the scheme, known as deposit “passporting”, after James Brokenshire, the housing secretary, put forward the proposal yesterday at the Chartered Institute of Housing conference in Manchester.

The planned scheme is designed to ease the pressure on millions of renters who typically need up to five weeks rent to fund a deposit for a new rental home while having money tied up with an existing landlord.

According to the Deposit Protection Service, the average rental deposit is £1,040 in England and Wales, while tenants in London face paying around £1,750 when moving property.

Passporting would allow a direct transfer of funds from the previous landlord to the new one on the day of the move.


The previous landlord would still be able to claim part of the deposit for any damages, and the tenant could top up the deposit if necessary.

But while the deposit passporting has potential, it should not be made compulsory, according to the National Landlords Association (NLA).

The organisation quite rightly points out that care will need to be taken with any form of passporting to ensure the previous landlord can cover any costs for damages.

NLA research reveals that 33% of landlords had to withhold at least part of a deposit in the last 12 months to cover unpaid rent or damage to their properties.

Chris Norris, director of policy and practice at the NLA, said: “The idea of deposit passporting has been around for a while now, so it comes as no surprise that the Government is considering it. Mr Brokenshire acknowledges that if this is to be implemented it must be done “thoughtfully”, but we must make sure that adequate thought is given to the needs of both tenants and landlords. 

“Everyone agrees that moving between tenancies should be made easier and cheaper, but we also need to recognise why landlords take deposits. A deposit protects against damage or default, so landlords must be confidence their costs are covered before releasing the tenants’ money.”

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