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PARTNERS AND SUPPLIERS
What 2025 taught us about deposit disputes: Lessons from the Tenancy Deposit Scheme adjudication team
As the year draws to a close, many landlords are taking stock of how 2025 has reshaped the private rented sector. With rising costs, The Renters Rights Act, and a renewed focus on property standards, one constant remains: the importance of clear communication, good evidence, and proper deposit protection.
At the Tenancy Deposit Scheme, our adjudication team handles tens of thousands of deposit disputes every year - offering free, impartial resolution when landlords and tenants can’t agree at the end of a tenancy. This year’s data reveals valuable insights into what landlords are getting right, what could be better, and how to prepare for 2026.
The state of deposit protection in 2025
New data from the TDS Statistical Briefing 2024/25 shows the continued growth and maturity of the UK’s tenancy deposit protection landscape:
- 4.7 million deposits are now protected in England and Wales, a small increase from 4.68 million in 2023/24.
- The average deposit has risen to £1,175, reflecting both inflationary pressures and higher rents across the private rented sector.
- Around 54% of deposits are held in custodial schemes and 46% in insured schemes, showing that landlords and agents are continuing to use both models effectively.
Despite the rising value of deposits, disputes remain reassuringly rare. In the 12 months to March 2025, just 1% of all deposits (46,950 cases) required formal adjudication. That means 99% of tenancies ended without the need for a dispute, a testament to good awareness, documentation, and communication between landlords and tenants.
What are the main causes of disputes?
While the overall number of disputes remains low, the reasons behind them have stayed remarkably consistent. The TDS Adjudication Team’s analysis shows that the five most common claim areas were:
| Type of Claim | % of Disputes (2024-2025) |
|---|---|
| Cleaning | 54% |
| Damage | 49% |
| Redecoration | 31% |
| Gardening | 14% |
| Rent arrears | 10% |
Cleaning continues to be the single biggest source of disputes, appearing in over half of all TDS dispute cases. This often comes down to differing expectations at check-out, which could be avoided with clearer inventories, better communication, and photographic evidence.
Damage and redecoration disputes typically arise when wear and tear is confused with negligence. Adjudicators often see cases where the landlord’s evidence doesn’t show the original condition of the property clearly enough to justify a deduction, or the landlord is looking for a full replacement when a repair is more reasonable.
Many disputes could be resolved long before adjudication if landlords and tenants communicated early, shared good-quality evidence, and understood the difference between damage and fair wear and tear.
Lessons from the year: What landlords can learn
1. Evidence is everything
Photographic or video inventories remain the single most effective way to support a claim. Adjudicators can only make decisions based on the evidence provided. It is good practice to ensure that both parties sign and date the inventory. At check-out, carry out a like-for-like comparison using similar lighting and camera angles to make any changes obvious.
2. Communication prevents escalation
A proportion of disputes could have been avoided with earlier communication. Whether it’s a tenant reporting damage sooner, or a landlord explaining why a deduction is being made, transparency builds trust.
If an issue arises, document each exchange; emails, messages, and maintenance records can all demonstrate reasonableness and prevent misunderstandings.
3. Wear and tear isn’t damage
A common error to make is confusing natural deterioration with tenant neglect.
For instance, faded paintwork, minor carpet flattening, or worn sofa fabric are typically considered fair wear and tear. In contrast, deep stains, burns, or tears would usually justify a deduction. Adjudicators will always assess age, quality, and expected lifespan of items when deciding what’s fair.
4. Regular inspections pay off
Early identification of issues like leaks, mould, or minor repairs not only protects the property but helps maintain a positive relationship with tenants. Inspections also provide dated evidence of the property’s condition, which can be invaluable if the tenancy ends on difficult terms. Landlords who carry out routine inspections - particularly in longer tenancies – should see fewer disputes at the end of tenancies.
5. Keep up with compliance
2025 has been a year of transition for landlords, with the Renters’ Rights Act now law, and the forthcoming Awaab’s Law extension set to introduce new standards for repairs and response times. These changes highlight the growing expectation for landlords to act swiftly on issues that affect tenant health or safety.
Landlords who stay ahead of these regulations - and keep thorough maintenance and communication records - will be best positioned to avoid both compliance breaches and deposit disputes.
How to avoid being part of the 1% deposit disputes
If there’s one message to take from this year’s figures, it’s that the vast majority of landlords never experience a dispute. To stay out of that 1%, landlords should:
- Protect the deposit promptly with a government-approved tenancy deposit scheme like TDS.
- Provide tenants with the prescribed information and check they understand how deposit protection works.
- Carry out thorough, dated inventories at check-in and check-out.
- Keep all maintenance and communication records.
- Be realistic, fair, and transparent when considering deductions.
Looking ahead to 2026
As we head into 2026, landlords can expect more focus on compliance, energy efficiency, and tenant wellbeing, but the fundamentals will stay the same:
clear communication, solid evidence, and fair treatment on both sides.
The Tenancy Deposit Scheme will continue to support landlords, agents and tenants through expert adjudication, free online guidance, and practical training to help the private rented sector remain fair, transparent, and professional.
2025 has shown that when landlords combine professionalism with good record-keeping, disputes are the exception, not the rule. The key is to treat deposit protection not just as a legal obligation, but as an opportunity to build trust and accountability.
For more guidance, case studies, and training resources, visit the Tenancy Deposit Scheme website.
Not with the Tenancy Deposit Scheme?
Visit our TDS Help Centre to find more guides, tools and templates, all designed to make the life of our customers easier. Some of our resources are only available to customers who use the free deposit protection scheme at TDS Custodial or the insured scheme at TDS Insured. You can access all templates, tools and the full tenancy deposit management dashboard by joining the Tenancy Deposit Scheme.
