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Over 4,000 letting agents turn to Deposit Protection Scheme

09 April 2010
Written by rosalind renshaw

The Deposit Protection Scheme has broken new records in protecting deposits after recruiting a large number of new letting agent members.

Kevin Firth, director of the DPS – the only scheme which physically takes deposits, as opposed to insuring them – said that last month was the busiest in the scheme’s three-year history, protecting over 48,000 deposits. At the start of this month, 3,800 deposits were protected in a single day.

He said yesterday on his website: “When we launched, we were aimed at private landlords with small property portfolios. However, the DPS has proven popular across the whole industry, including large portfolio landlords and letting agents.

“We’re continually told by agents that tenants feel safer when their deposit is protected by a trusted third party rather than the agent or landlord – and they would prefer to choose an agent that has our sticker in the window.

“In the last year we have taken on 4,295 new agents; the largest influx in the first four months of 2010, presumably the combined effect of low interest rates and the TDS fee increases.

“In short, our scheme is a viable and popular option for agents and we’re happy to talk to anyone who wants more information.”

The DPS is also introducing a new facility for 'bulk uploading' properties.

Meanwhile, the TDS looks to be in a stable position. Although it has lost its single largest member, Countrywide, following its price hikes, a sizeable majority of agents have apparently renewed their membership. A statement following a board meeting yesterday is awaited.

At the third scheme, mydeposits, a second provider of Alternative Dispute Resolution has been taken on. CEDR Solve will be adjudicating disputes along with IDRS.

The hiring of an additional organisation follows the signing up of Countrywide Residential Lettings. A spokesman for mydeposits said the organisation was committed to using only external, independent adjudicators.

Chief executive Eddie Hooker said:  “Although only 0.6 per cent of all deposits currently protected by mydeposits end with the need for formal adjudication, it is important that our business model remains robust if more dispute cases are raised.”

Comments

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    TDS needs to really get its act together and maybe hope that DPS gets swamped and even slower on settlements so that agents think maybe TDS wasn't such a bad thing after all. What TDS must not do under any circumstances is get complacent because they haven't lost as many agents (and their fees) as they feared - if indeed they haven't. My belief is that many agents are still weighing up their options including increased use of Assured Tenancies or no deposit warranty schemes (both routes have flaws). Above all many who would have left, and who begrudge paying TDS' inflated fees because they have stayed, have only done so on the basis of paying 50% of the first invoice with the second part now compulsory for them to pay by June 30th. However then comes the time TDS really needs to be on its game - early July and the second invoice and the amount of time agents will then have to get organised if they do w3ant to defect to another scheme. Many this time round have not done so because the fee in the end looked just about acceptable and, above all, because they have not had the time to fully weigh up the transfer options and above all, volume transfer processes. July 1st to September 30th will give agents plenty of time so if the second invoices are in any way more than simply a mirror image of the first - and in many cases they will be - then TDS will be hit by wave two of the defections. What TDS should really worry about is the comment from Countrywide that cost was not the issue, but service. Given that estimates guess their fee at £500K that's some poor service.

    • 09 April 2010 14:44 PM
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    After a customer relations disaster, looks like it could be RIP...TDS

    • 09 April 2010 12:50 PM
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    Slight correction - it should, of course, have read "Based on the DEPOSIT PROTECTION SERVICE figures etc...." Apologies to all at DPS

    • 09 April 2010 10:04 AM
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    It will be more than interesting to hear from TDS Ltd what levels of desertions have occurred. One assumes that this will be included in their eagerly awaited post Board Meeting statement, which one would also assume will give the long overdue and very necessary assurances that the business is solvent and viable for the next 12 months. Based on the Dispute Service figures above and combining those with CRL, the number of tenancies lost would seem likely to be close to 100,000? Then add the other agents who have moved their portfolios to mydeposits and the numbers could be substantial.

    • 09 April 2010 08:53 AM
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