tenancy deposit protection scheme

A Guide to Tenancy Deposit Protection Schemes for UK Landlords

For tenants and landlords, the tenancy deposit protection scheme is a bit tricky to handle. Confusion is being observed in the legalities tenancy deposit because of the tenant fee ban. You might wonder about what amount should be paid? What could possibly be the deductions? Stop worrying if you are overwhelmed with the struggle of a deposit scheme and its ins and outs.

According to a recent survey, 60% of the landlords find the tenancy deposit scheme challenging, so, you are not alone in this. In this article, you will get to read everything that you require to know about the tenancy deposit protection scheme. This includes the following:

  • Tenancy Deposit Protection Scheme – The Basics
  • Tenancy Deposit VS Holding Deposit
  • Calculate Deposit Amount

tenant deposit scheme


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Tenancy Deposit Protection Scheme – The Basics:

The tenants are required to pay a certain amount before they plan to move into a rental property. Typically this amount is a rent of five weeks at max. Normally this amount is paid at the time when the first month’s rent is paid after the agreement is settled and signed by the tenants. Also, this requirement needs to be fulfilled before you move into the rental property.

In the UK, this deposit is required to be registered and here comes the need for a deposit protection scheme. This amount is in safe hands because of the deposit protection scheme. When the tenants leave the rental property, this amount is safely handed over to them. Moreover, this deposit is helpful for the landlords in a way that it covers the cost of any damage or pending payments owed by the tenants.


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The Amount of Tenancy Deposit:

As mentioned above the tendency deposit in the UK is an amount is equal to the rent of five weeks. Whereas, the annual rent is below £50,000. The mentioned limit of the deposit was a part of the tenant fee ban in 2019. It saves the tenant from overpaying unnecessarily.


Tenancy Deposit VS Holding Deposit:

A tenancy deposit is different from a holding deposit. A holding deposit is equal to 1 week’s amount and is paid when the tenant intends to apply for a rental property. However, A tenancy deposit is equal to 5 weeks’ rent amount and is given back to the tenant on leaving the tenancy.

Holding a deposit has a purpose, it is to hold the house for the tenant and essentially ‘reserve’ it. Tenants must get their holding deposit again as a deduction from their first month’s rent amount. A tenancy or protection deposit is included with a deposit protection scheme and isn’t given back to the tenant till the tenancy ends.

In case a tenant no longer meets the conditions mentioned in the tenancy agreement. He damages the property, or doesn’t pay their bills, the owner can deduct the amount from the deposit to cowl this.


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Calculate Deposit Amount:

To calculate your accurate deposit amount, you should first learn one week’s rent amount. It’s not a mistake to do that by really dividing your one month’s rent amount by 4. As a few months are longer than 4 weeks, this isn’t accurate. One week’s rental amount can be calculated as follows:

(one months’ rent  x 12) ÷ 52 = one week’s rent amount

Multiplying this by 5 will provide your deposit limit.

Here’s an instance with a single month’s rent of £500:

£500 x 12 = £6,000

£6,000 ÷ 52 = £113.30

£113.30 x 5 = £566.50

If your deposit amount is an extended decimal quantity, it’s a fine practice to round off the figure down, not up, to make certain you don’t exceed the legal cap.



With the hope that this article helped to develop a better understanding, we can sum up the discussion by saying that the deposit protection scheme is beneficial for the tenants as well as the landlords. It ensures that none of them can violate the rules and regulations that might cause damage to society and citizens.


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Disclaimer: This article intends to provide general information based on the tenancy deposit protection scheme.

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