Tenants who pay a deposit to a landlord will now have enhanced protection under the new Tenancy Deposit Protection Scheme.

Part six of the Housing Act 2004 states that landlords and agents will, by law, have to sign up to one of three schemes including The Deposit Protection Service, Tenancy Deposit Solutions and The Tenancy Deposit Scheme.

The changes should improve tenants’ rights and ensure that their deposits are not unfairly withheld. When the landlord and tenant agree how it should be returned, it must be paid back within ten days.

Ruth Kelly of the government said: “With the average deposit coming in at around £700, we are talking about significant amounts of money. People hand over deposits in good faith and rely on getting their money back in order to move on to their next property. It is not right that under the current system lack of protections and lengthy, costly arbitration procedures mean that thousands of tenants end up waving goodbye to their cash. The changes we have made will put an end to this.”