Lifetime deposits – Should landlords now be ready for their introduction
by Rajiv Singh, 03-11-2021

Lifetime deposits–should landlords now be ready for their introduction?

The idea of lifetime deposits – where renters’ deposits effectively move with them from tenancy to tenancy, making the process potentially cheaper and quicker – has been talked about for some time, but it’s an idea that moved a step closer after what was said by a junior minister at a fringe event at the recent Conservative Party conference in Manchester.

Eddie Hughes, a housing and homelessness minister at the recently renamed Department for Levelling Up, Housing and Communities (DLUHC), said at an event organised by housing charity Shelter and the Onward think tank that he and his colleagues ‘are still in the middle of meetings and consultations’ about rental reform, which has long been anticipated to include lifetime deposits.

At the same time, he strongly implied and effectively confirmed that lifetime deposits will be a major part of the Renters’ Reform Bill when it is finally brought before Parliament – now expected to be at some point in 2022.

The minister told the fringe meeting that there would definitely be a lifetime deposit system enabling renters to move more easily between privately rented homes. This was a much more decisive reply than was provided on the prospect of a mandatory landlord register or the abolition of Section 21.

When will lifetime deposits be introduced?

Hughes made it pretty apparent at the Conservative Party conference fringe meeting that the White Paper for rental reform would still be some time off. However, it wasn’t until more recently that this was backed up by the government when it announced that the White Paper will not be appearing until next year rather than autumn – as had previously been proposed on numerous occasions.

In a statement announcing the delay, DLUHC said contributors to the preparation of the document – which is expected to inform the Bill proposing rental reform - have been told that the extra time will give the government the chance to create a ‘balanced package of reforms’.

Campaign groups like Shelter and Generation Rent have criticised the government for what they say is slow work on removing Section 21 eviction powers – given this was a Conservative manifesto pledge in December 2019 and set to be a key part of the planned Renters’ Reform Bill. But the delay was much more warmly welcomed by Isobel Thomson, chief executive of safeagent.

She said the body welcomed the clarity on when the White Paper on reforms to the private rented sector will be published, and said it makes sense to wait for the findings of the National Audit Office’s review of ‘existing regulation and exploration of key sector organisations' aspirations for private rental sector reform for the benefit of tenants and landlords’.

She added: “safeagent took part in the NAO’s review and looks forward to the report being published.”

DLUHC’s letter to participants announcing the delay said that ‘building more time into our policy development will not only allow us to benefit from continued work with the sector but will also allow us to carefully consider the findings of the National Audit Office’s review of regulation in the sector’.
The NAO’s is due to report its findings in the coming months.”

The letter went on: “I hope you agree that it is better for us to take the time to get these reforms right working in partnership with colleagues than to rush something out that misses the mark.”

Lifetime deposits – what does the latest delay mean?

It’s clear that lifetime deposits now won’t be introduced for quite some time, and most likely not until the second half of 2022. Even once the White Paper has been released, the Bill will then need to make its way through Parliament – where it’s likely to face obstacles and opposition – before becoming law. We only need to remember how long the Tenant Fees Act took to become statute for an idea of how this might be held up.

However, after Hughes’s words at the conference, it seems more certain than ever that lifetime deposits will be introduced – it’s no longer a matter of if but rather when, although this is still likely to be quite far in the future.

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About Rajiv Singh

A Chartered Accountant in UK with 15+ years of experience in FinTech Consulting, Accounting & International Taxation. I enjoy being a Social, Foodie and Father of two young children, reachable at linktr.ee/RajivSingh.

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