New research highlights the significant upfront costs tenants face when moving home, with many required to pay double deposits alongside other expenses. This financial burden can reach thousands of pounds, creating challenges for renters navigating the housing market.

Rising upfront costs for tenants

A recent study conducted by deposit alternative provider Reposit reveals that tenants typically encounter upfront costs totalling around £3,450 when moving home, excluding rent payments. This figure accounts for the need to cover two cash deposits simultaneously—one tied up in the current tenancy and another required for the new property—plus an average of £834 in associated moving expenses.

The average cash deposit for a property with a monthly rent of £1,133 currently stands at £1,308. When tenants must provide deposits for both their outgoing and incoming tenancies, this amount doubles to £2,616. Adding typical moving costs brings the total upfront financial outlay to the £3,450 mark.

Deposits remain inaccessible during tenancy transitions

Ben Grech, CEO of Reposit, emphasises that deposits represent a hidden cost in the moving process. He explains: “Many renters expect their deposit to be returned in time to help fund their next move, but in reality, that money is often still tied up when a new tenancy begins.”

This overlap means tenants must find additional funds to cover the new deposit while waiting for their previous deposit to be refunded. Coupled with removal fees and other household expenses, this situation can create a significant affordability challenge at a critical time.

Government guidance on deposit protection

In response to ongoing concerns about tenancy deposits, the government has issued guidance under the Renters’ Rights Act regarding deposit handling when tenants give notice. Landlords are required to place tenant deposits in government-approved tenancy deposit schemes such as the Deposit Protection Service (DPS), MyDeposits, or the Tenancy Deposit Scheme (TDS).

This regulatory framework aims to protect tenants’ funds and ensure deposits are managed transparently throughout tenancy transitions, although it does not alleviate the immediate financial strain caused by overlapping deposits.

What this means for landlords

Landlords should be aware that tenants may face considerable financial pressure when moving between properties, particularly due to the requirement to provide deposits for both outgoing and incoming tenancies simultaneously. Understanding this challenge can inform more empathetic communication and negotiation around tenancy renewals and move-out timings.

Additionally, compliance with government deposit protection schemes remains essential to safeguard tenant funds and maintain trust. Landlords who adhere to these requirements contribute to a fairer rental market, even as tenants navigate the complexities of moving costs.

Source: Based on reporting from Property118

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