Ruthless landlords rip off £5.5m in rent scam

August 22, 2003

Unscrupulous landlords will wrongfully withhold more than £5.5 million of students' rent deposits this summer, according to a report published this week.

About 35,000 students will lose out, say the charities Shelter and Citizens Advice, which are launching a campaign to make landlords accountable.

Ben Jackson, director of external affairs at Shelter, said thousands of students would face financial difficulties this summer thanks to a few ruthless landlords, and many students would have problems raising money for new tenancies as a result.

"They are taking advantage of these young people and withholding their money without good reason," he said. "They are let down again when they realise that it will be extremely difficult to get their money back.

"The government must protect the people who are being cheated out of their money and listen to all those - including its own backbenchers - who support a tenancy deposit scheme. There is no excuse to let this rip-off continue."

The charities call for a national tenancy deposit scheme to protect a total of nearly £800 million of tenants' money that they say is held by landlords without any form of statutory regulation.

The report finds that one in five private tenants says they have had all or part of their deposit unreasonably withheld. The government's figures show that each year 1,000 tenants have difficulty in getting money back, with £20.1 million worth of deposits being wrongfully withheld.

The campaign is supported by the National Union of Students, the Association of Residential Letting Agents, the Local Government Association and a number of consumer groups, as well as nearly 150 MPs. A select committee report also recommends the scheme be included in the forthcoming housing bill.

Verity Coyle, NUS vice-president for welfare, said the arbitrary holding back of students' deposits was unfair and was done with little accountability, adding to the students' financial pressures.

She said: "Run properly and with probity (a mandatory deposit scheme) can be of benefit to both the student and landlord."

Currently, the only way students and other tenants can get their money back is by issuing court proceedings.

Shelter and Citizens Advice say that many people simply write off the loss because this process is too costly, slow and daunting. For the tenants involved - especially those on low incomes - this can lead to hardship, debt and, in extreme cases, the prospect of homelessness.

David Harker, chief executive of the Citizens Advice Bureaux, said disputes over the return of deposits continued to cause major problems for its clients.

"Too many landlords treat rent deposits as their own money, instead of money handed to them in trust. Many do not even bother to give tenants a proper reason for failing to pay it back," he said.


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