The importance of a tenancy deposit.

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

Rightmove logo
Breaking News

Ten years on: More first-time buyers moving to cities while the coast stands still

New ten-year analysis of the property market shows that more first-time buyers are looking to move to cities, while the coast has seen no growth in new buyers First-time buyer demand to move to Great Britain’s 50 largest cities (excluding London) is up by 16% on average over the last ten years, with Dundee topping…
Read More
Breaking News

Homeowners in England and Wales overvalue their properties by an average of 16%

Homeowners in England and Wales are overestimating the value of their property by an average of 16%, according to new figures. Data from Quick Move Now compares homeowner estimates with formal estate agent valuations and is broken down by both region and property type. Overall, homeowners overvalue in every single category.   Regional breakdown Region…
Read More
Visual blemishes on Roads due to service upgrades
Estate Agent Talk

Emergency Sidewalk Repairs: When to Act and Who to Call

Sidewalks are the unsung heroes of city infrastructure—quietly assisting tens of millions of footsteps every day. But when they crack, disintegrate, or shift all of sudden, they might quickly turn out to be volatile liabilities. In a town like New York, in which pedestrian site visitors are constant and belongings proprietors are legally chargeable for…
Read More
Breaking News

Reapit report reveals agents’ long-term market confidence amid legislative challenges

Despite the significant challenges posed by a shifting economic landscape and the largest wave of housing legislation in decades, estate and letting agents remain steadfast in their confidence about their long-term future in the industry. According to the first Reapit Property Outlook Report 2025, covering the full breadth of sales and lettings agency opinion countrywide,…
Read More
Breaking News

Owner-Occupiers Drive Resilient Commercial Property Market

Buying Becomes 37% Cheaper Than Renting The latest Commercial Property Demand Index from specialist property finance expert, Rangewell, reveals that while investor appetite across the sector held steady in Q2, strong levels of owner-occupied commercial mortgage activity are helping drive market performance, as business owners increasingly move from renting to buying their long-term premises for…
Read More
Breaking News

One year of Labour: Property market performance review

Investors left waiting for planning reform and incentives but majority plan to increase real estate allocation   Biggest failures: Lack of incentives for developers and investors, and ineffective planning reform Top priorities: Planning reform, tax incentives, and attracting international capital Where opportunities lie: Data centres, warehousing & logistics, and later-life housing Real estate debt is…
Read More