Letting agents raided more than £1m from tenants' deposit schemes last year, a BBC investigation can reveal. Fourteen letting agents were prosecuted in the UK in 2016 for helping themselves to tenants' cash. Despite the Tenancy Deposit Scheme being introduced to protect tenants' money, deposits can still be held in a bank account controlled by the landlord or agent.
Property expert Ajay Jagota said this is the sector's "dirty little secret".
Since 2007, landlords and their agents have had a legal requirement to put every tenant's deposit in a government-backed scheme, such as the Tenancy Deposit Scheme.
But deposit money can either be held in a custodial account run by the scheme, or it can be held in a bank account, which the landlord or letting agent can access at any time.
Mr Jagota said: "An average small independent agent would probably be managing about 200 properties which would equate to £300,000 in tenancy deposits. We think this is the sector's dirty little secret where they can dip into this account when they see fit."
He said there is "no need" to take cash deposits and properties should be insured against careless tenants.
