Abolish rental deposits, property expert urges

A leading property expert has moved to welcome plans to reform rental deposits. What’s more, Southampton MP Alan Whitehead Labour MP has called for policy makers to abolish the legislation altogether.

Chancellor George Osborne has recently revealed the Government’s intention to change rental deposit laws, while deputising for David Cameron at Prime Minister’s Question.

Pot luck

Mr Whitehead also said that letting agents are, ‘completely unregulated,’ which in turn led tenants to rely on, ‘pot luck’ when trying to find scrupulous property owners.

Osborne noted, ‘we are looking at what we can do to make sure that people who rent have proper consumer protection, including protection from landlords who withhold deposits unreasonably.’

Property expert Ajay Jagota, owner and founder of property firm KIS, the first letting agents to abolish monetary deposits, feels that these kind of deposits should be scrapped across the sector.

Solutions

Mr Jagota said, ‘Alan Whitehead was quite right when he said renters can face pot luck when it comes to choosing the right landlord or letting agent. The irony is that a glaringly obvious solution to that problem has been staring everyone in the face for some time. He was less right when he claimed the lettings industry is unregulated. In fact landlords and letting agents need to comply with almost 150 individuals pieces of legislation.’[1]

Instead of churning out more red tape for good landlords or creating new costs to be passed on to tenants, the simplest and most effective landlords or creating new costs to be passed on to tenants, the simplest and most effective solution to guarantee a better deal for renters is to abolish deposits and move the private rented sector towards the insurance-backed model used in almost every other industry on the planet,’ Jagota continued.[1]

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Rising rents

Continuing, Jagota noted, ‘study after study concludes that they are the biggest barrier to entering and moving house in the private rented sector, with our research showing the average renter needs to stump up more than £1,000 to get the keys to a new home before they’ve even paid the first month’s rent.’[1]

‘But time and time again policy-makers ignore this in favour of the same old cul-de-sacs and clichés like banning of letting agent fees or rent controls. Not only would abolishing deposits mean the £3.2billion being release into the wider economy, £2bn of which is literally just gathering dust and interest right now, it would make it easier for renters to move house, easier for them to keep a house and easier for them to save for a property of their own.’[1]

‘A survey recently showed that 78% of renters want greater protections from their landlords – this is the simplest and most effective way of giving them that piece of mind,’ he concluded.’[1]

[1] http://www.propertyreporter.co.uk/landlords/politicians-urged-to-abolish-rental-deposits.html