The Deposit Protection Service has been granted approval by the UK government to run an insurance-based deposit protection scheme in England and Wales.
The new scheme will run alongside the DPS’s existing custodial scheme.
The DPS currently runs the only custodial based deposit protection scheme in England and Wales and will be the only scheme to offer landlords and letting agents both options.
It will also bring the number of approved insurance-backed schemes in England and Wales to three.
The new insured scheme is due to launch in April 2013, with landlords and letting agents able to register in advance from now onwards (technically, from October 1).
As with the custodial scheme, landlords and letting agents will be able to register with the service online as well as by phone, and manage both their custodial and insured deposits through one easy online account.
The DPS insured scheme will not be charging registration fees to its customers and says it will provide ‘industry competitive protection fees’ for landlords and letting agents when the scheme launches in April.
Participation in the DPS insured scheme will be open to all private landlords on a pay as you go basis. Letting agents will need to be members of professional bodies with Client Money Protection insurance.
Kevin Firth, director of the DPS, said: “We’re delighted to be able to announce a new insurance based deposit protection scheme from the DPS brand.
“We strive to provide the industry with an excellent service, and offering both insured and custodial options will ensure landlords and letting agents have the choice of protection from the leading supplier of TDP in the UK.”
The DPS launched in 2007 and currently protects over 900,000 deposits.