The Government has announced plans to abolish insured tenancy deposit schemes which means landlords and letting agents will no longer be permitted to hold tenants' deposits in their client accounts, even where those deposits are protected through an approved insurance-backed scheme.

Housing Minister Matthew Pennycook confirmed that the Government intends to move to a single custodial model, requiring all tenancy deposits to be transferred to an authorised custodial tenancy deposit scheme at the outset of the tenancy.

The proposal forms part of the Government's wider programme of housing reform and is intended to strengthen consumer protection by ensuring that tenancy deposits are always held by an independent third party.