News from 19 June 2026
Ministers have explained why they are considering changes to insured tenancy deposit schemes. In a written answer on 12 June 2026, the government compared schemes where the landlord or agent holds the money with custodial schemes where a provider holds it.
What is being discussed?
England and Wales currently have government-approved tenancy deposit protection schemes, and landlords commonly choose between two models. In a custodial scheme, the deposit is transferred to the scheme provider, which holds it until the tenancy ends or a dispute is resolved. In an insured scheme, the landlord or agent holds the deposit, while the scheme provides protection if something goes wrong.
The latest written answer says ministers are looking at the difference between those models because tenant representative groups have reported low awareness of the distinction. The government also pointed to concerns that tenants may feel under more pressure to accept deductions where the landlord or agent still holds the money, rather than using alternative dispute resolution.
In a related written answer, the minister said the department receives performance data from tenancy deposit providers and engages with stakeholders about service quality and user experience. The government says it wants tenants to have confidence in how their deposits are protected and returned.
What happens next?
The written answers do not by themselves change the deposit rules overnight. They do show that insured schemes are under policy scrutiny, and that ministers are framing custodial protection as a way to improve confidence and reduce risk.
For now, landlords should avoid treating the issue as settled until formal rules, commencement dates and scheme instructions are published. The sensible step is to make sure current deposit protection is clean, documented and easy to evidence. If reform does move towards custodial-only protection, landlords with tidy records and a clear process will be in a stronger position to adapt.
This article is for general information only and is not legal, financial or tax advice. Landlords dealing with a live deposit problem, possession claim or disputed deduction should use official scheme guidance or take appropriate professional advice.
Current official guidance: GOV.UK: tenancy deposit protection.
The June report referred to a parliamentary written answer. A discussion of possible reform is not a change to the current scheme rules.
If you disagree about a deposit
If you are discussing a deduction, explain the amount and the evidence behind it. Consider the tenant’s response fairly, including wear and tear. Use your deposit scheme’s guidance or dispute service if you cannot agree.
