IN THE final three months of last year, ARLA letting agents held more than a quarter of a billion (£264.5 million) pounds of tenants' money in deposits.

These were held against damage and dilapidation in 218,000 properties among the portfolios let by letting agents.

Only 7.9 per cent of these tenancies ended with a dispute over the allocation of deposits between landlord and tenant. Agents successfully resolved eight out of 10 disputes after negotiating between the two parties.

Overall, the average deposit held was £1,213 but there were major regional differences. In prime London, the average deposit held was £2,206 compared to £1,058 for the South East and £627 for the rest of the country.

Adrian Turner, chief executive of the Association of Residential Letting Agents, ARLA, said: “This is the first time that such a major survey of letting agents has looked into the amount of tenants' monies actually held on deposit. Even this does not fully illustrate the true scale of the amounts that are protected under the ARLA Bonding scheme.”

The survey showed that, taken nationally, on average each ARLA member letting office holds deposits against 174 properties. In addition to tenants' deposits, letting agents clear rents through their client accounts and hold floats for maintenance and repair and, in some instances, tax retentions.

“In the case of ARLA members, we know that all these sums of money that belong to the public and not the business are processed and held through client accounts that are fully bonded against any form of misappropriation,” Mr Turner explained.

“This is why ARLA backs the government over the Tenancy Deposit Scheme and is actively consulting over Law Commission proposals to reform housing law.”

The Law Commission is to explain how proposals will be developed at the annual ARLA conference at the end of this month.

In the case of disputes over deposits, the survey found that 24 per cent of all ARLA agents had had no disputes at all over deductions for damage and dilapidations.