Letting agents warned over deposit registration risk
The latest analysis by The Letting Partnership has revealed that letting agents are now responsible for handling almost 70% of all protected tenancy deposits across England, prompting a warning that recent changes introduced under the Renters’ Rights Act could expose significant weaknesses in how deposits are registered and managed.
The Letting Partnership analysed deposit protection data across England, looking at the estimated number of deposits protected each year and the proportion registered by letting agents versus landlords.
The analysis shows that the number of deposits registered by letting agents has increased at an estimated average annual rate of 3% since 2021. In 2025 alone, agents handled an estimated 2.98 million protected deposits across England, accounting for 69.5% of all deposits protected during the year.
This growing concentration of client money being handled by agents comes at the same time as major changes to tenancy completion processes under the Renters’ Rights Act, changes which The Letting Partnership warns could create a significant compliance risk around deposit registration.
Under the new rules introduced from 1st of May 2026, agents can no longer collect rent before the tenancy agreement has been signed by all parties. However, tenancy deposits can still be taken prior to signature.
This creates a new operational sequence where agents may receive the deposit before the tenancy agreement is completed and before the tenancy formally begins. The issue is that the 30-day deadline for deposit registration starts from the moment the deposit is received, not from the tenancy start date.
The Letting Partnership warns that if an agency’s software or internal workflows trigger deposit registration from tenancy activation or commencement dates instead of the point at which funds are received, there is a real risk that the registration deadline could be missed entirely.
The risk is particularly acute where there is a delay between deposit receipt, agreement execution and tenant move-in, something that is expected to become more common under the new tenancy process.
With letting agents now responsible for handling the vast majority of protected deposits across England, The Letting Partnership believes the issue represents a significant client money and compliance risk for the sector if processes are not reviewed and adapted quickly.
Chris Mason, COO of The Letting Partnership, commented:
“The changes introduced under the Renters’ Rights Act may appear relatively minor operationally, but they create a genuine compliance risk for agents if internal processes haven’t been updated accordingly.
Where agencies are now taking deposits before tenancy agreements are signed, there is a risk that deposit registration deadlines are being triggered earlier than some systems or workflows are designed for. If those triggers are linked to tenancy start dates rather than receipt of funds, agents could find themselves breaching registration requirements without immediately realising it.
Given that letting agents are now responsible for handling almost 70% of all protected deposits across England, this is fundamentally a client money handling issue. The agencies that avoid problems will be those that have reviewed their workflows, software processes and accounting controls to ensure they reflect the new tenancy timeline under the legislation.”
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