Mydeposits scheme says it's a profitable business

News Category: Industry News

Mydeposits, the insurance-backed tenancy deposit scheme, made around £600,000 profit from a £7m turnover in its last financial year.

It says its profits were entirely ploughed back into the business, to improve its service.

The revelation came in an interview with chief executive Eddie Hooker, who criticised remarks made by Professor Martin Partington, new chairman of the rival and beleaguered Tenancy Deposit Scheme.

As reported in Monday’s EAT, Partington said that the TDS was in a fix not of its own making, because it had to follow Government rules about how it – and the other schemes – are allowed to charge.

Communities and Local Government does not permit the schemes to charge landlords or tenants for dispute resolution.

Partington said that trying to budget for an unpredictable number of disputes and tenancies was impossible. He wants to be able to charge a basic subscription, with extra levied on agents with a high level of disputes.

But Hooker says there is nothing to stop TDS from setting its own rate card.

He said: “I found some of the comments Professor Partington made quite staggering. He suggested that his hands are tied by CLG, but there is nothing in either of our contracts to say that we cannot set our own fees.

“It is wrong to say that pricing was imposed by CLG.”

Mydeposits in fact uses the same pricing model as TDS – based on the number of tenancies. It does, however, charge considerably more than TDS per tenancy – between two and three times more.

For landlords, each tenancy protected by Mydeposits costs £30 including VAT. For ‘accredited’ agents – those who belong to ARLA, NALS and RICS – the fee is £20 plus VAT, with the cost coming down to £15 plus VAT if volume tenancies (up to 200) are registered.

For ‘regulated’ agents with more than 200 tenancies registered, costs are individually negotiated. Non-accredited agents pay £30 plus VAT.

Foxtons, Countrywide and LMS are all customers of Mydeposits.

Mydeposits, launched by the National Landlords Association, does not publish its accounts or an annual report. However, its accounts are filed at Companies House.

Hooker said that while it does charge more than TDS, that was irrelevant: “The fact is not that we are more expensive, but that we got our sums right. It is all very well having a cheap model, but if it is not robust, how does that help the lettings industry?”

He also said that all three of the tenancy deposit schemes deal with the same statistic: “For all of us, the dispute ratio is 1.2% of all tenancies registered,” he said.

A spokesman for TDS said: “Unlike Mydeposits, TDS is a not-for-profit organisation. If they are profitable, it is because they charge considerably more. Despite our difficulties, we have always tried to provide good value for money.”


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