One in three renters have lost money from their deposits, while landlords and letting agents take too long to return the money at the end of a tenancy, says a new survey.
Building society Nationwide is calling for a law change to help tenants find the cash to move home after finding more than 40% of tenants have had deposit deductions for wear-and-tear or cleaning costs.
The society is one of the UK’s largest buy to let lenders through it’s The Mortgage Works brand.
The report also reveals tenants may have to wait up to two months for the return of their deposit once they have moved out of a rented home.
Some (4%) waited for more than six months, while 18% did not receive their money back for more than three months.
However, 54% of renters had never lost any deposit money and 7% had never paid one.
Paul Wootton, Nationwide’s director of specialist lending said: “There must be a better way to address the gap in deposits created when one tenancy ends and another begins.
“To ensure all private tenants have a better and more uniform experience, we need to consider more pragmatic solutions, including transferring deposits from one tenancy to the next, providing appropriate short-term loans or a guarantee.
“Nationwide is already working with other organisations who are equally aware of the need for a practical approach that meets the needs of both tenants and landlords, without being an obstacle to moving home.”
Younger tenants are more likely to have deposit deductions, says the survey.
Two thirds of 18-24 year olds were charged for wear-and-tear and redecorating.
The survey comes as the government has given notice that the new Tenants Fees Bill expected to come into force next year in England caps excessive costs for tenants leaving a rented home and orders deposits should be returned in a reasonable time.
The bill has a clause demanding landlords provide receipts for repairs and redecoration.