Formal disputes over tenancy deposits continue to affect only a small fraction of the private rented sector, despite rising rents and deposit values, according to the Tenancy Deposit Scheme (TDS) Group. Their latest Statistical Briefing 2025 reveals that just 1% of protected deposits in England and Wales were subject to formal adjudication during 2024/25. This stability in dispute rates highlights the effectiveness of current deposit protection measures and the professionalism within the sector, which is reassuring news for landlords and letting agents.

Low Incidence of Deposit Disputes Despite Rent Increases

The TDS Group’s Statistical Briefing 2025 shows that out of over 4.7 million protected deposits in England and Wales, only 46,950 cases were formally disputed in 2024/25. This represents a slight increase from 0.91% the previous year but remains consistent with the long-term trend of disputes affecting around one in every hundred tenancies. For landlords, this means that the vast majority of tenancies conclude without contentious deposit issues, reducing the risk of costly and time-consuming adjudications.

Steve Harriott, chief executive of TDS Group, emphasised the importance of fair and transparent deposit protection as rents and deposits rise. He noted: “It is encouraging that more than 99% of tenancies still end without a formal dispute, demonstrating the professionalism of agents and the cooperation of tenants across the sector.” This suggests that clear communication and good tenancy management continue to play a key role in minimising disputes.

Common Causes of Deposit Disputes

Cleaning remains the most frequent cause of deposit disagreements, featuring in 54% of cases, followed closely by damage at 49%. Redecoration issues accounted for 31% of disputes, gardening 14%, and rent arrears 10%. These figures underline the importance for landlords and agents to conduct thorough check-in and check-out inventories and to set clear expectations with tenants from the outset. Detailed inventories and documented property conditions can significantly reduce the likelihood of disputes over cleaning and damage.

Trends in Deposit Protection and Values

The number of protected deposits in England and Wales rose to 4,706,470 during 2024/25, with their combined value increasing by approximately 6% to £5.53 billion. The average deposit reached £1,175, the highest recorded level, reflecting annual rent rises of 7.9% in England and 8.8% in Wales to March 2025. This increase in deposit amounts corresponds with the upward trend in rental prices, emphasising the growing financial commitment required from tenants and the increased stakes for landlords in protecting their properties.

Custodial schemes now hold the majority of deposits by volume, representing 54.41% of all protected sums, while insurance-backed schemes account for a slightly larger share by value at 54.65%. Landlords should be aware of these distinctions when choosing deposit protection schemes, as each type offers different benefits and operational procedures.

Regional Variations: Scotland and Northern Ireland

Scotland continues to experience a higher dispute rate than England and Wales, with 5,951 disputes raised in 2024/25, equating to 2.44% of protected deposits. Although the total number of protected deposits in Scotland slightly decreased to 243,283, their overall value rose to £215.5 million. Cleaning was the main issue in 58% of Scottish disputes, followed by damage at 39% and redecoration at 25%. Private rents in Scotland increased by 5.7% over the year.

In contrast, Northern Ireland recorded the lowest level of formal deposit disputes, with only 358 cases in 2024/25, representing 0.49% of protected deposits—a decrease from the previous year. The total number of protected deposits increased to 72,790, with an average value of £709.50. As elsewhere, cleaning and damage were the most common causes of disputes.

Implications for Landlords and Agents

These statistics demonstrate that while rent and deposit values continue to rise, the incidence of formal deposit disputes remains low. For landlords and letting agents, this reinforces the value of maintaining detailed inventories, clear tenancy agreements, and open communication with tenants. Employing best practices in property management can help avoid disputes and ensure a smoother tenancy conclusion.

Where disputes do occur, the TDS free and impartial adjudication service provides a swift and fair resolution without the need for court involvement, saving landlords time and legal costs. Understanding the common causes of disputes can help landlords proactively address potential issues during the tenancy.

Looking Ahead: Trusted Partners Hub Launch

The Landlord Association (TLA) is launching a new Trusted Partners Hub in Q1 2026. This platform will feature verified and approved service providers selected to support landlords, tenants, and property management businesses. Legal, trades, insurance, financial, mortgage, tenant screening, and other service providers are invited to register their interest to become TLA Trusted Partners. This initiative aims to enhance the quality and reliability of services available to landlords and agents, further supporting effective property management.