Security deposits on rental properties must be protected in a government-approved scheme or through an insurance policy. If these conditions aren’t met, you may be entitled to compensation and the return of the deposit, even if it has not been lost or withheld.

The insurance broker, Just Landlords, says that 98 per cent of the people it surveyed have no idea they could claim so much compensation if a landlord fails to follow the rules.

Rose Jinks of Just Landlords says, “There is a staggering and worrying lack of knowledge when it comes to deposit laws and tenants’ rights.” In fact Jinks is concerned that the PPI claims machine may soon turn its eye onto the category.

“We believe that the companies seeking PPI compensation for consumers may turn to unclaimed tenancy deposits when the deadline arrives in August this year, especially because more people rent from a private landlord.

“Tenants may find that they could claim three times their deposit, plus the original deposit, if their landlord didn’t comply with the law, while landlords could be faced with a significant bill.”

How is it meant to work?

Most people renting in the UK will have to pay a tenancy deposit. Landlords, or a letting agency acting on their behalf, must protect this in one of the three government schemes — the Deposit Protection Service (DPS), Dispute service (TDS) or Mydeposits — and advise the tenant which one within 30 days. Increasingly landlords can also use an insurance scheme to protect the deposit.

Many renters complain not that their landlord hasn’t protected their deposit, but that it’s difficult to get the full amount back when they exit. When your tenancy has ended you should request the return of your deposit, after which time the landlord or letting agency has ten days to return your money.

Landlords are entitled to make deductions from this if you have not paid full rent, you have damaged the property, left it dirty, or there are items missing.

What to look out for?

Many tenants complain that landlords are too quick to find cause to keep hold of their cash. According to the English Housing private landlords survey of 2018, roughly a quarter had some of their deposit withheld when they moved out, mostly for damage to the property or its contents. Shelter, a housing charity, argues many deductions are unfair, or too steep.

The things a landlord can deduct money for must be set out in your tenancy agreement. They can’t make deductions for normal wear and tear, worn carpets, minor scrapes and scuffs on the walls, or faded curtains. Nor should they charge too much for replacing missing items — £50 for a new door matt that can be bought for £5, for example.