New legislation brings financial benefits to UK tenants

Author: Rent Guarantor


While new legislation in the Buy-To-Let (BTL) Private Rental Sector (PRS) has added to the workload of landlords and letting agents, it has had the effect of being financially beneficial to tenants across the UK. Following the introduction of the Tenant Fees Act 2019, many tenants are receiving a partial refund on their deposit when they agree a new rental contract for the same property.

While this is great news for tenants as it frees up some useful cash for them, it also works to confirm that landlords and lettings agents are following the new, updated rules where any new tenancy agreements can only request a maximum deposit of five weeks rent, or six weeks where the annual rent is over £50,000.  

Tenants receiving deposit refunds

Analysis from Tenancy Deposit Scheme (TDS), which is a Government approved tenancy deposit protection scheme for tenants in England and Wales, shows that since the Tenant Fees Act 2019 came into force, it has processed some 2,550 deposit repayments.

Those repayments, relating to the need for a lower deposit, totalled £817,031.33. This gives an average tenancy deposit repayment of £320,27 while the highest single deposit repayment made to a tenant by TDS was £3,384.62.

“We reviewed data from when the legislation was first introduced in order to establish how frequently deposits are being partially repaid by agents or landlords,” said Assistant Director of Business Development at TDS, Debbie Davies. “We believe the deposit cap is having the effect intended by Parliament, with the deposit held being reduced upon renewal, which is great news for renters.”

Is there an alternative to tenancy deposits?

While its good news for tenants that they’re receiving a refund on their deposits to be in line with new legislation, there are some who think a deposit free agreement works well too. Flatfair is a property technology business offering letting agencies and tenants the option to manage and rent a property without the need for an upfront deposit.

The business is expanding in the UK and is confident that alternatives to traditional upfront tenancy deposits is something that can work for landlords and tenants.

“The growing demand for deposit replacement services in the UK shows that a more equitable solution that affords landlords enhanced protection, while saving tenants money, is possible,” said Franz Doerr, CEO of flatfair.

“Instead of diverting resources into solutions that perpetuate the existing tenancy deposit model, Government should promote the adoption of alternative tenancy deposit initiatives by incentivizing landlords who opt for alternative deposit solutions introducing clearing platforms for financial transactions,” he added.

This service is among a rise in proptech offerings, including services like ours,, allowing landlords and letting agents, as well as tenants, gain more financial security without either party paying out a significant amount of money – unless it’s required at the end of, or during a tenancy.

By utilising these new solutions, landlords can continue to invest in the PRS BTL sector, but with more certainty that their tenants can afford their rent and that, if something changes, that rent or deposit will be covered, no matter what.

The UK’s rental market is changing, with greater demand than ever before, more regulatory burdens but also new innovative ways to manage within the industry. It could be worthwhile finding out more about these different ways to help you manage your portfolio and help your tenants while giving yourself additional peace-of-mind.