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Landlords’ Guide to Using a Tenancy Deposit Scheme in Peterborough

Name: Landlords’ Guide to Using a Tenancy Deposit Scheme in Peterborough
Brand: Progressive Lets
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By Wayne Beecham | Created on 19th January 2026

All landlords are advised to take a tenancy deposit from their tenants, to cover them for loss and damage to the property and its fixtures and fittings. But did you know that the law says you must protect it in a government-approved landlord scheme?

As well as being a legal obligation, using an approved scheme will also give you access to an independent dispute resolution service, should you need it.

If you’re new to renting out property in the Northampton, Boston or Wisbech areas, we answer some frequently asked questions about the schemes, to help you keep on the right side of the law.

What Is A Tenancy Deposit Scheme (TDS)?

Starting in April 2007, the law has required landlords in England and Wales to safeguard their tenants’ deposits in one of three government-approved TDS schemes.

Which Schemes Can I Join?

You have to join a scheme, but you can choose which one – the three schemes for landlords in England to join are:

Different schemes apply in Scotland and Northern Ireland.

Landlords are free to decide which one they choose, but you must give details to your tenant within 30 days of receiving their deposit.

Which Deposit Scheme Is Best?

There are pros and cons of each tenancy deposit protection scheme, and slightly varying registration costs. They all offer a free custodial scheme, paid insurance service, and free dispute resolution service but some points set TDP schemes apart from each other.

1. The Deposit Protection Service

Founded in 2007, Deposit Protection Service is the largest of the three, with its insured scheme costing £18.75 per deposit (or £27.75 for deposits over £500). They also provide bespoke discounts for landlords who want to insure deposits for over 100 properties.

2. MyDeposits

MyDeposits has also operated since 2007 and charges £20 for each deposit insured (or £13.20 if you have NRLA membership). It offers a business development team, PAYG membership plans and bulk deposit uploads to support landlords with larger property portfolios.

3. The Tenancy Deposit Scheme

Launched in 2003, the Tenancy Deposit Scheme is the longest running and the only non-profit organisation of the three TDP schemes. It’s backed by ARLA Property Mark, the National Residential Landlords Association (NRLA) and the Royal Institute of Chartered Surveyors (RICS).

Insured deposits are charged at £19.50 for tenancy deposits under £500, and £26.70 thereafter, with annual plans for corporate landlords. Once again, membership with the NRLA means you can get a discount: Deposits under £500 are insured for 13.20, or 17.95 if over £500. If tenants raise a dispute on a TDS insured deposit, you must hand it to the scheme.

What Is The Difference Between Custodial And Insurance Schemes?

There are also two different types of TDS – custodial and insurance. All three government-approved tenancy deposit schemes offer both options. Custodial schemes are free to use and can make life simpler for landlords. If interest rates are high, an insured scheme can let you benefit from interest on the deposit amount, but you will have to pay a fee so do your calculations first.

how to get deposit back from tenancy deposit scheme

Custodial Deposit Schemes

Custodial schemes protect the whole deposit during the period of the tenancy. The landlord needs to pay the deposit into the scheme. At the end of the tenancy, the deposit – or an agreed amount minus costs for any damage – is returned to the tenant by cheque or bank transfer.

The scheme has its own independent arbitration service. If the landlord and tenant can’t agree on any deductions, the arbiter will decide on a figure to be returned to the tenant. If this isn’t acceptable to either party, the matter will need to go to court.

Custodial schemes are free of charge for landlords to use.

Insurance Deposit Schemes

With an insurance-backed TDS, the landlord holds onto the deposit, but pays a fee to the scheme to insure the payment. The landlord should not use the money for any other purpose during the period of the assured shorthold tenancy. At the end of the tenancy, if the landlord and tenant agree on any deductions, the landlord will return the deposit to the tenant.

As with the custodial scheme, any disputes will go to the scheme’s adjudicator. The insurance element of the scheme means that if the landlord fails to return the deposit, the scheme will pay the tenant and claim the money owed from the landlord.

What Is The Current Law Around Deposits?

As a landlord, you don’t have to ask your tenant for a deposit. If you do, there are limits on how much you can ask your tenant to pay in England. In most cases, tenant deposits are limited to the equivalent of five weeks’ rent on annual rent under £50,000. If the annual rent is £50,000 or more, the cap rises to six weeks’ rent.

What Must A Landlord Do With A Tenant’s Deposit?

When you receive the deposit from your tenant you must put it in the government-backed scheme you have chosen to use within 30 days of signing the tenancy agreement. You must inform your tenant about the scheme you are using and its independent adjudication service.

What About Holding Deposits?

If you take a holding deposit to secure the property until the contract’s signed, you do not need to protect it in a scheme. But if the holding deposit becomes part of the security deposit, it must be protected.

What Are The Schemes’ Benefits For Landlords?

For landlords, the main benefit of a TDS is the alternative dispute resolution service. This free and independent arbitration is beneficial if landlords and tenants disagree about deductions for damage.

Should a dispute arise, you will need to provide evidence to the adjudicator to back up your claim. It is therefore vital that you are thorough in preparing your inventory at the start of the tenancy, taking photos and videos of the condition of the property and all fittings and fixtures.

What If A Landlord Fails To Fulfil Their Obligations Under A TDS?

The law says you must:

protect your tenant’s deposit in a government-backed scheme
give your tenant the required information about the scheme (known as prescribed information)
do the above within 30 days of receiving the deposit.

If you don’t, the court may order you to repay the deposit and pay compensation to your tenant of up to three times the value of the deposit. You may also find it more difficult to evict your tenant, using a Section 21 notice, should you have reason to do so (find out how to evict a tenant in our article).

What Are The Tenant Benefits Of A Deposit Scheme?

Using a tenancy protection scheme gives your tenant the reassurance that their deposit will be protected properly. The dispute service also gives them the peace of mind that any disagreements about damage to the property will be settled fairly and independently.

What Are The Costs To A Landlord?

Custodial schemes are free to join. Insurance schemes have a very small joining fee (under £30). The amount you pay depends on the size of the deposit being protected and whether you are a member of the National Landlords Association (NRLA).

What Can A Landlord Deduct From The Security Deposit?

Various costs to the landlord can be deducted from a deposit at the end of the tenancy, but landlords cannot withhold money without legal reasons for doing so. You can only make deductions with the agreement of the tenant, an independent adjudicator or the courts, and you may need to provide evidence supporting your claim.

You cannot charge tenants for fair wear and tear like minor scuffs to walls or general wear to carpets, or for betterment. If you opt to upgrade or buy new instead of repairing, you can’t pass on the whole cost. If you’d rather upgrade, apportion the cost so tenants pay up to the necessary amount, while you cover the remainder.

Reasons why you might withhold part of a deposit at the end of a tenancy:

to cover any unpaid rent or bills
missing items that were listed on the inventory
damage to the property and its contents, either deliberately or as a result of negligence
failure to carry out duties set out in the rental agreement, such as garden maintenance, with garden clearance costing £150-£350 on average
cleaning costs at an average of £200-£450 for staining or where tenants have failed to keep the property in a hygienic condition – though landlords cannot charge an end-of-tenancy professional cleaning fee without cause, as outlined by Shelter.
to cover the cost of storing and removing unwanted belongings left in the property after keys have been returned, which can cost around £350

What Digital Tools Can Help Landlords Manage Deposits?

Landlord software, apps and online portals can help with managing tenant deposits and documentation. For example, they can offer digital inventory tools, document templates and online signature capabilities. Or if you rent out HMOs and student lets, features like bulk uploads could allow you to submit multiple deposits at once.

how does the tenancy deposit scheme work

How Does The TDS Work For Student & HMO Tenancies?

Tenants renting separately are responsible for their own monthly rent, condition of their own room and its furnishings, and common areas. However, every tenant is equally liable in a joint tenancy with a shared deposit – such as a group of students renting together.

If one joint tenant moves out and another replaces them, landlords can give the outgoing tenant their share of the deposit (with written confirmation of receipt). You can then create a new agreement and deposit registration, or amend the original documents for the incoming tenant to sign.

Timeline & Process For Deposit Protection

It’s illegal not to protect your tenants’ deposit, and you could face a penalty. Tenants can pursue legal action for compensation of 1-3 times the total deposit amount if you don’t follow the rules.

Start of the tenancy. You have 30 days to protect your tenant’s deposit in a government-backed scheme, and inform them how to get the deposit back.
End of the tenancy. You have 10 days to return the deposit once you and the tenants agree on the amount.
Disputes. Tenants usually have 90 days to make a claim.
Submit evidence. You will usually have 14 days to submit evidence.
Adjudication. Your deposit protection scheme’s dispute resolution service will make a ruling within around 28 days.

Tenancy Deposit Protection FAQs For Landlords

What happens if I protected my tenant’s deposit late but within 30 days of receiving it?

As a landlord, you are required to protect your tenant’s deposit and provide the prescribed information to the tenant within 30 days of receiving the deposit from the tenant. As long as you have done both, you will be compliant with the Housing Act legislation.

Can I use a different tenancy deposit scheme if I switch letting agents mid-tenancy?

Yes, you can legally change to a different tenancy deposit protection scheme if you switch letting agents mid-tenancy, but you must provide the prescribed information to the tenant within 30 days. It is recommended that landlords transfer the deposit into the new scheme as soon as possible once the previous scheme releases the funds.

Do I need to re-protect a deposit when a fixed-term tenancy becomes periodic?

No, if the tenancy agreement moves from fixed term to periodic, you are not usually required to re-protect the deposit. Some insurance-based schemes require you to update them or pay a renewal fee if the tenancy moves over to periodic, so you should check for any specific requirements with the scheme you have used.

What information must be included in the prescribed information given to tenants about their deposit protection?

Once you have transferred the deposit into an approved scheme, you should provide the tenant with the following information:

– Name of the scheme used
– Contact details for the scheme
– Type of scheme (custodial/insured)
– Deposit amount
– Address of rented property
– Date the deposit was paid
– Landlord’s details
– Letting agent’s details (if used)
– Tenant’s name

You should also include details about what happens to the deposit at the end of the tenancy, including what could result in money being deducted (e.g. damage beyond wear and tear, unpaid rent). Also include details of how the tenant can request their deposit back and how they can raise disputes.

Can I protect a holding deposit in a tenancy deposit scheme or does it only apply to security deposits?

No, only the security deposit can be paid into a tenancy deposit protection scheme.

How do I prove I’ve protected a deposit if the scheme provider has changed or merged since I registered it?

If the scheme provider changes names or merges with another company, you can contact the new provider to request that they re-issue an updated certificate with the correct details on. You should also be able to use the online deposit check tools to confirm protection status.

What’s the difference between custodial and insurance-based deposit protection schemes for landlords?

The key difference between a custodial and insurance-based scheme is that with a custodial scheme, the money is transferred into the scheme but with an insurance-based scheme, the landlord keeps the deposit. The insurance provides the required protection to the tenant.

Can a tenant claim compensation if I protected their deposit but failed to serve the prescribed information correctly?

Yes, failing to serve the prescribed information is a breach in legal responsibilities, so even if the tenancy deposit is protected, landlords must still meet the requirements of serving prescribed information within 30 days. The tenant will be able to claim compensation if this has not been done.

Do tenancy deposit protection rules apply to company lets where the tenant is a limited company?

No, if the tenant is a limited company and the tenancy agreement includes the company name and not an individual, the tenancy deposit rules do not apply.

What happens to deposit protection requirements if I’m selling a rental property with sitting tenants?

It is important that the deposit remains protected throughout the sale. There are two main options, either the deposit remains in the existing tenancy scheme, or the new landlord can switch to a new scheme. If the deposit is remaining in the same scheme, the new landlord’s details should be provided to the scheme providers, and the new landlord or letting agent re-serves the prescribed information to the tenant with the new details.

If switching to a new scheme, the seller should remove the deposit and transfer it to the buyer who then protects it in the new scheme and provides the prescribed information to the tenant.

Do you have questions about your rental property in Cambridgeshire or Northamptonshire? If you’re a new landlord in the Peterborough area, we can help you understand more about the responsibilities that come with your role. Contact us to find out more.

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Wayne Beecham

Wayne is East Midland’s answer to property management. His hard work and high standards of service have gained him a fierce reputation within the regional lettings market. He knows what it takes to own and manage a profitable portfolio himself, because he is not only a successful investor and landlord, but co-founder and “hands on” managing director of Progressive Lets.

Landlord Checklist for Renting a House in Peterborough

Landlords | 12 Mins Read

Landlords’ Guide to Using a Tenancy Deposit Scheme in Peterborough

What Is A Tenancy Deposit Scheme (TDS)?

Which Schemes Can I Join?

Different schemes apply in Scotland and Northern Ireland.