While tenancy disputes did see a year-on-year decline in volume during 2021, the latest industry insight from mydeposits show that there was still an estimated £27 million worth of deposits held in rental disputes between tenants and landlords.
The way disputes should be dealt with
In the case of financial loss due to a tenant, landlords can make deductions to the rental deposit held within an official government-authorised deposit protection scheme.
While in most instances deductions are agreed upon between tenants and landlords themselves, those that are disputed will be judged by an adjudicator stipulated on the deposit use clause.
This outlines, for example, if the deposit can be held to cover the cost of cleaning, missing items, outstanding rent, or unpaid utilities.
The cost of a deposit may have fallen by 1.2% year-on-year at an average of £1,005 per tenancy, yet this is still regarded as a considerable sum and so tenants are well within their rights to challenge any deductions made if they feel they are unfair.
The recent figures show that over 4.5 million tenancy deposits are protected across the UK rental market, which has climbed 2.3% on the previous year alone. The reality of this is that an enormous £4.6 billion is held in deposit protection schemes, again up 1.1% on the year prior.
The number of challenges made and the sum that is being challenged have both shown an annual decline – which is, fortunately, a step in the right direction.
The average amount disputed dropped from £793 to £784 in 2021, while the combined number of disputes also declined by 12% to 34,444 last year. This means that the figures as a percentage of all disputes held has dropped as well, down from 0.9% to 0.8%.
However, despite such a small number of tenants disputing the deductions made to their tenancy deposit, mydeposits still estimates that the total value of rental disputes sat at almost £27 million in 2021.
Now, you might be wondering what the most common reasons for these disputes are?
Cleaning was by far the most contentious issue between tenants and landlords when it comes down to deposit disputes, with damages to the property, restoration costs, gardening and rent arrears also ranking high.
Eddie Hooker, chief executive officer of mydeposits and the Hamilton Fraser Group, said: “It’s only natural that a certain number of landlords and tenants won’t see eye to eye when it comes to rental deposit deductions. On the one hand, the deposit held is a considerable sum of money for the average tenant. At the same time, landlords will understandably expect their property to be returned in the same condition as it was let and to be paid the rent owed in full.”
“The good news is that deposit deduction disputes are actually few and far between and account for less than one per cent of all deposits held within authorised protection schemes.”
Hooker concluded: “We’ve also seen a reduction in total disputes lodged, which suggest the rental sector has become a more harmonious place over the last year, or that tenancies post-pandemic are increasing in length, resulting in less end of tenancy issues. Either way, it looks as though the sector is heading in the right direction where tenant-landlord relationships are concerned.”