Dec

Average tenant deposit set to drop for first time since 2015 as £1.9bn paid in this year

admin

Research by Hamilton Fraser’s deposit
alternative scheme Ome, has revealed the current cost of the average deposit
facing UK’s tenants and how this has changed since 2015.

The Hamilton Fraser Group has an extensive
knowledge and database of deposit protection having operated the government
authorised scheme mydeposits since 2007, as well as operating its own
adjudication service HF Resolution, with the company handling around 25% of all
new deposits taken out each year.

New deposits are those paid within each year
for a new tenancy and not the total amount of deposits held full stop.

The data shows that so far in 2019, the
current tenant is paying an average rental deposit of £1,299, with an estimated
1.5m new deposits paid this year to a value of £1.9bn.

However, while we still have one month to go,
the data suggests that the amount paid for the average deposit is due to drop
for the first time in five years, already down 3% from last year’s average of
£1,336, although it is still 7% higher than in 2015.

What’s more, the number of new tenant
deposits being taken and the total value have both seen a consistent drop each
year since 2015.

So far in 2019, the number of new deposits
being taken has declined by 17% when compared to last year, while the total value
of these deposits is also down 19% from some £611m to £496m. Looking over the
last five years, the number of new deposits being taken has declined by 22%,
while the total value is down 17%.

Co-founder of Ome, Matthew Hooker,
commented:

“We’ve seen a decline in the number and value
of new deposits being taken over the last few years and a driving factor behind
this is a change in our lifestyle choices to rent for longer, which reduces the
number of deposits being taken and the total value as tenants opt to stay put
in the same property.

Although the average cost for the individual
tenant has continued to climb due to increasing rents which form the basis of
the deposit calculation, this year looks to be the first in a long time that we
might actually see this cost drop.

This has largely been driven by new
legislation that has reduced the number of weeks rent an agent or landlord can
charge for both a holding and tenancy deposit.”

Ome data for 25% of the market

Year	Total count of deposits	Change (%)	Total value of deposits	Change (%)	Average deposit value	Change (%)
*2015*	493,281		£600,038,861		£1,218
*2016*	522,410	6%	£635,432,960	6%	£1,228	1%
*2017*	503,690	-4%	£628,579,539	-1%	£1,257	2%
*2018*	460,201	-9%	£610,727,222	-3%	£1,336	6%
2019*	382,411	-17%	£495,677,600	-19%	£1,299	-3%
Five Year Change	-110,870	-22%	-£104,361,261	-17%	£81	7%
*2019 data covers January to November.

**Estimated national totals***
Year	Estimated count of deposits	Change (%)	Total value of deposits	Change (%)
*2015*	1,973,124		£2,400,155,444
*2016*	2,089,640	6%	£2,541,731,840	6%
*2017*	2,014,760	-4%	£2,514,318,156	-1%
*2018*	1,840,804	-9%	£2,442,908,888	-3%
2019*	1,529,644	-17%	£1,982,710,400	-19%
Five Year Change	-443,480	-129%	-£417,445,044	-17%
*Estimations based on Ome data with 25% of all deposits multiplied by four.