£100M cost of tenant deposit protection

Scottish landlords will be forced to transfer more than £100 million into the government’s new tenancy deposit scheme when it gets under way later this year, experts estimate.

Fears are growing that the costs of the scheme will feed through to rental prices after property experts warned that thousands of Scottish landlords would need to collectively pay as much as £100.9m to the government’s administrators.

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The first Scottish deposit schemes will begin in July but landlords have until mid November to transfer tenant deposits to the administrators overseeing the safe-keeping fund, according to Lomond Capital.

It estimates that around 224,000 rented households could be affected by the regulations. And while most landlords maintain deposits in separate accounts, many use downpayments as working capital, meaning thousands of landlords will need to find large sums of money.