More renting reform could be on the cards after the government announced a study into the benefits of deposit free renting – to be published within 6 months.

The government’s response to recommendations made in the Housing Communities and Local Government Select Committee’s examination of the draft Tenants Fees Bill, published alongside the final draft of the bill published last week, states:

“We have noted the Committee’s suggestion that Government should encourage innovation in the deposit free renting sector by assessing the merits of alternatives to traditional security deposits and reporting their findings to the Committee. Government will explore the merits of deposit alternatives and reply to the Committee within six months”

News of the study was welcomed by Ajay Jagota, founder of deposit free renting firm Dlighted and head of the #ditchthedeposit campaign.

Ajay had this to say: “The deposit establishment was practically cracking open the champagne last week when the final draft of the Tenants Fees Bill left a system they profit from enormously at the expense of landlords and tenants largely intact, but this announcement shows more reform could be on the cards – and could be with us within months.

The government’s thinking is clear – they’re coming around to the view that deposits are ‘unreasonable’ ‘excessive’ and make entering and moving within the private rented sector ‘financially prohibitive’. They don’t meaningfully ‘mitigate real financial risk’ and the money could be ‘better used in the wider economy’ – and I couldn’t have put it better myself.

We’re talking about a system which sucks £4.2bn from our economy, makes renting unaffordable and costs landlords tenants without adequately protecting them against rent arrears and property damage. Intervention is needed to address these market failures, and it could be here by the end of the year.

Even if this study doesn’t lead to new legislation the final Tenant’s Fees Bill still contains the provision for the Housing Minister to move the 6-week deposit cap whenever they feel like it – and there’s no reason to think that cap couldn’t be set at zero”.