Landlords will soon be able to lodge tenancy bond payments online.

At present, the only way they can do it is by cheques paid to the Ministry of Business, Innovation and Employment.

Building and Housing Minister Nick Smith said a contract had been signed with the software developer Unisys to set up the new payment system, which was expected to go live in 12 months.

Dr Smith said the move would be welcomed by both landlords and tenants, who have been saying for some time that they want to be able to complete the process online.