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By D
13/01/2015

English Tenancy Deposits Are Less Interest-ing

A very brief note to point up the slightly less than earth shattering Housing (Tenancy Deposits) (Specified Interest Rate) (Revocation) (England) Order 2015. This comes into force on 4 February 2015 in England only and revokes the equally fascinating Housing (Tenancy Deposits) (Specified Interest Rate) Order 2007.

The 2007 Order set the interest rate offered by the custodial tenancy deposit protection scheme run by the DPS at 2.32% below the base rate of the Bank of England. The base rate has been below that figure for quite some time and shows little prospect of creeping above it any time soon so the Order is nugatory. In addition the Housing Act 2004 was quietly altered some time ago to make the payment of interest on tenant’s deposits by the custodial scheme optional.

In fact the 2007 Order constrained something of an error as it has essentially specified a negative interest rate which should really require the DPS to take money from tenant’s deposits. Probably a good thing it is being revoked!

D is a solicitor specialising in landlord and tenant matters with a London firm.

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