Landlords and agents face ban on holding tenant deposits
Original Article Summary
Insured deposit schemes look set to be axed
Investor Analysis
The UK government plans to abolish insured tenancy deposit schemes, requiring all deposits to be held in custodial schemes by approved third parties. This removes a common cash flow tool used by multi-property landlords and agents, increases dispute exposure, and demands immediate compliance action once enacted.
Investor Relevance
Landlords currently using insured schemes to retain deposit funds — common among portfolio and HMO investors — will lose this cash flow mechanism and face new operational demands. Non-compliance risks penalties of up to three times the deposit and restrictions on possession recovery, making this a material compliance and cash management issue.
Original Source:
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