The importance of a tenancy deposit.

March 9, 2015

Choosing the right tenant for your property can be tricky. Sometimes the perfect tenant comes along, they want to stay in your property forever and make it their home. They love, respect and admire your property.

However, sometimes you think you have that perfect tenant, but quickly realise you made a wrong decision.

Perfect tenants don’t need a blog post about them, they’re perfect. This is about the not so perfect ones.

To make sure you’re protected even when you make that flawed decision, tenancy deposits were invented.

The tenancy deposit is a key part to trusting a tenant to rent your property. It protects the landlord in the event of the tenant damaging the property or leaving without paying the rent.

What the tenancy deposit covers should always be confirmed in the tenancy agreement that both the tenant and the landlord/letting agent signs. The deposit belongs to the tenant and should be returned at the end of the tenancy, on the condition the property is in the same condition as before they moved in.

During the course of the tenancy, the deposit should be kept in a third party deposit protection scheme (see our blog on how to avoid disputes to find out which on is best for you).

If by any chance, losses do occur, the landlord is entitled to make reasonable deductions from the deposit to cover them (reasonable means you don’t charge a grand to clean a bathroom).

The deposit size often depends on the monthly rent. Normally it is the equivalent to one or two months’ rent. However, there is no legal restriction on the amount that may be asked for (but you will find it more difficult to find a tenant who will pay anymore than that). A larger deposit may be requested if a landlord is concerned about previous tenancies or the tenant’s credit rating.

Having a detailed inventory report will play an instrumental asset for both parties when it comes to the end of the tenancy. Although it is not the law to conduct an inventory before a tenancy, it is rare not to do so. An inventory will give a detailed description of the property before the tenancy and can assist in making sure no damages have occurred in the duration of the tenancy.

Third party inventory providers can be unreliable and in-house can take a big chunk out of your day. Digital inventory creating software cuts the time to create an inventory by 80% and ensures that every report is professional, detailed and accessible.

Alex Evans

You May Also Enjoy

Estate Agent Talk

Buying Alone? What Solo Buyers Need to Know Before Making an Offer on a House

Figures show that solo buyers accounted for 36.9% of Barclays’ mortgage completions in June 2026, as more people chose to step onto the property ladder without a partner beside them. Choosing independence over waiting for a joint purchase has doubled over the last 50+ years, with solo first-time buyers doubling from 15% before 1980 to…
Read More →
Estate Agent Talk

How to Make a New-Build Living Room Feel Less Like a Show Home

An empty new-build living room can be surprisingly difficult to furnish. The walls are freshly painted, the sockets are in place, and there is nothing to remove before decorating begins. Yet once the sofa arrives, the room can still feel unsettled: too bare in some places, awkwardly crowded in others. The answer rarely involves buying…
Read More →
Breaking News

Mortgage Borrowing Dip

Key points: Net borrowing of mortgage debt by individuals decreased to £3.9 billion in September, from £4.2 billion in August, below the previous 6-month average of £4.9 billion. Net mortgage approvals for house purchases decreased to 53,400 in September, below an average of around 58,800 over the previous 6-months. Approvals for remortgaging increased to 42,600…
Read More →
Breaking News

Autumn Budget 2026: Property industry reaction

Following today’s Autumn Budget, reaction from property industry experts on six key areas for the property market. First-time buyer support: The £4.7bn Your First Home equity loan scheme, supporting 70,000 buyers, alongside the introduction of a new First Time Buyer ISA. Inflation and borrowing costs: The extension of the fuel duty freeze, household energy support…
Read More →
Breaking News

Can you legally BAN Halloween Trick or Treaters?

People who dread the annual knock of trick-or-treaters may have more power to keep Halloween callers away than they realise. As millions of children prepare to take to the streets on October 31, a property law expert has explained what homeowners can do if they do not want strangers walking up their path or knocking…
Read More →
Estate Agent Talk

What the sector need to do differently to give first time buyers a chance

By Peter Hawley, Director, SOWN (part of LRG) The mortgage and property sector needs to stop assuming that younger buyers are either ready to buy outright or not ready at all. For many, the reality is somewhere in between. They may have stable employment, a deposit and a strong desire to own, but still find…
Read More →