As much as £750 million could be sitting inside England and Wales’s tenancy deposit system as dormant or unclaimed balances, according to new analysis from The Letting Partnership.
The estimate sharpens a gap in the government’s deposit reform debate. Ministers have already been reviewing how deposits should be protected in future, but the latest intervention asks a different question: what happens to money that is never reclaimed after a tenancy ends?
That matters to landlords now because any reform that widens reporting, reconciliation or end-of-tenancy rules could pull agents, schemes and owners into a more tightly policed system. Even without any suggestion of wrongdoing, the focus is shifting from simple protection to what records can prove after the tenancy is over.
Deposit reform debate is widening beyond insured schemes
The issue lands after Landlord Knowledge’s recent coverage of ministers weighing tougher oversight of agents and insured deposit schemes and its report on Matthew Pennycook’s warning that the 2028 deposit scheme retender must still show value for landlords. The Letting Partnership’s deposit compliance and reconciliation work gives some context for why dormant balances are moving into the conversation.
The company’s estimate, reported this morning, is based on publicly available housing and tenancy deposit data rather than an official central register. That means the £750 million figure is not a confirmed total. But the wider point is harder to dismiss: England and Wales do not have a formal dormancy framework for tenancy deposits, and there is no consolidated public figure showing how much money remains unclaimed once tenancies have ended.
This follows Landlord Knowledge’s earlier guide to tenancy deposit protection rules and scheme duties, which set out the compliance side of protecting deposits correctly. The new angle is what happens after that process when a tenant does not engage with repayment and the money remains sitting inside the wider system.
Scotland already has a route for unclaimed balances
Scotland has gone further. Official Scottish guidance on tenancy deposit schemes says unclaimed deposits can arise when a landlord starts the return process but a tenant does not respond and cannot be contacted. Separate Scottish reform papers have already examined how eligible dormant balances can be redirected to housing-related purposes after safeguards and time limits are met.
England and Wales have no equivalent structure. For landlords, that does not create an obvious immediate cost, but it does leave a policy vacuum. If ministers decide dormant balances need clearer treatment, the result could be new reconciliation duties, stronger reporting from agents and schemes, or a more formal process for closing out old cases.
The practical risk is not that landlords suddenly lose access to properly handled deposits. It is that the next phase of reform may ask for cleaner evidence trails around when repayment was offered, how tenants were contacted and when a case should be treated as finished rather than left open indefinitely.
What this means for landlords
- If you use an agent: ask how deposit records are reconciled against scheme data once a tenancy ends.
- If you self-manage: keep a clearer audit trail of repayment attempts, tenant contact and case closure dates.
- Watch for: whether ministers widen deposit reform into dormant-balance reporting or end-of-tenancy reconciliation rules.
- If you have older unresolved cases: review them now rather than waiting for any new compliance standard.
- Bottom line: the next deposit reform fight may be less about how money is protected at the start and more about how it is tracked at the end.
Editor’s view
The £750 million number may move around once better data appears, but the governance gap is real. Landlords should pay attention because deposit reform is starting to drift away from pure tenant protection politics and towards record-keeping, reconciliation and proof.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 3 September 2026
Sources: The Letting Partnership analysis, Scottish Government
Related reading: Pennycook says 2028 deposit scheme retender must prove value for landlords
