Insured tenancy deposit schemes to be scrapped
Summary
The government has proposed abolishing insured tenancy deposit schemes, meaning all tenant deposits would need to be held in custodial schemes run by approved providers. The change is intended to improve tenant protection and reduce fraud risk, with no implementation timetable yet announced.
Why it matters
Residential property surveyors involved in lettings, landlord advice or property management should note the likely shift in deposit handling and associated compliance processes. The reform may increase short-term administrative risk and disputes during transition, even if the underlying legal obligations remain broadly similar.
Key points
- Insured tenancy deposit schemes would be removed in favour of custodial schemes only.
- Deposits would be held by approved deposit protection providers rather than landlords or agents.
- The government says the change is aimed at improving tenant protection and reducing fraud risk.
- Commentary suggests the main impact will be on timing and administration, not the core legal duties.
- Existing insured deposits will need to be identified and transferred, with updated documentation and systems.
Organisations:
government, Tenancy Deposit Protection provider, Morr & Co
Regulations:
insured tenancy deposit schemes, custodial schemes
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