New tenancy deposit service to offer cheapest rates on market

The cheapest tenancy deposit rates in the market yet have been announced by a new scheme being launched by the Deposit Protection Service.

The new insurance-backed scheme will be in addition to the DPS’s custodial service, and will go head to head with the TDS and Mydeposits – the first launched by ARLA and the second by the National Landlords Association. Another contender, to be run by Capita, has yet to show its hand.

The new DPS scheme will charge no membership or annual renewal fees, meaning that the only paperwork will relate to pay-as-you go deposit protections.

Agents will be charged £9.50 plus VAT per deposit, with discounts available for volume. Landlords will be charged £15 including VAT for deposits under £500, and £22.50 for deposits over £500.

The charges all undercut existing costs. TDS charges agents either £13.25 or £10.25, depending on their level of discount. Mydeposits charges a £50-£100 per branch annual fee, plus between £10 (for SAFEagent members) and £35.

Landlords currently pay Mydeposits a £60 joining fee and between £17.50 and £30 per deposit. They pay the TDS £16.50 for deposits up to £500 and £24 for deposits over £500. The TDS DepositGuard scheme has a £75 annual fee and charges £15 or £22.50.
 
The DPS currently runs the only custodial based deposit protection scheme in England and Wales and is the first scheme to offer landlords and letting agents both custodial and insurance protection options. The new scheme launches on April 2, but it is possible to register in advance.
 
Landlords and agents will be able to register online as well as by phone, and manage both their custodial and insured deposits via one integrated online account. The new insured scheme is due to launch in April and landlords and letting agents are already registering in advance.
 
Kevin Firth, director of the DPS, said: “We’re delighted to announce the pricing for our insurance based deposit protection scheme and provide our customers with the best value for money deposit protection options.

“Our goal is to deliver excellent service to the industry, and offering the most cost-effective insured scheme alongside our custodial option will ensure that landlords and letting agents have the best choice of protection.”
 
The DPS custodial scheme currently protects over 970,000 deposits. The DPS was granted approval by the Government to run the insurance based deposit protection scheme in England and Wales last September.