Private renters have an average of £113 more in their pockets as a result of the Tenant Fees Act, Generation Rent research finds.

The campaign group is urging renters to check if their landlord holds more than five weeks’ rent as a deposit, which could result in a refund or protection from eviction.

The Tenant Fees Act made most fees to tenants in England illegal in June 2019, and placed restrictions on other charges made by landlords and letting agents. This includes the security deposit for a new tenancy being capped at five weeks’ rent.

According to Freedom of Information requests to the Ministry of Housing, Communities and Local Government, the average deposit value before the cap came in was £1,108 and this fell to £1,025 in March 2021.

However, if there had been no cap, and deposits had increased at the same rate as rents in those two years (2.69%), this figure would have been £1,138 – £113 more than the actual average.

As of March 2021 there was a combined total of £4.35bn protected by the three legally recognised deposit schemes – Tenancy Deposit Scheme, Deposit Protection Scheme and MyDeposits.

This dropped by £60m since March 2019, when the figure stood at £4.41bn.

As well as the size of deposits decreasing, there has also been a dramatic rise in the number of deposits protected in “custodial” schemes, compared to “insured” schemes, in the last few years.

The total value of deposits protected in insured schemes, where the landlord or letting agent keeps hold of the tenant’s deposit and pays an insurance premium, has declined by a total of £318m since 2017.

Meanwhile custodial schemes, where the deposit is held by the deposit protection scheme itself, have grown by a total of £258m in the same period.

Insured schemes remain the most commonly used schemes. As of March 2021, they were still used to protect 58% of all deposits by value.

However, the recent boost in the popularity of custodial schemes suggests that landlords and letting agents are finding it less cost-effective to hold them this way due to new client money protection regulations and lower interest rates.

The government has promised a Lifetime Deposit to reduce the barriers to moving between tenancies. At present several schemes offer a “deposit-free option” which lets tenants pay a lower non-refundable premium instead of a refundable deposit, but this costs households with no savings more in the long run.

Alicia Kennedy, Director of Generation Rent, said: “It is good to see that the Tenants Fees Act is having a positive impact in reducing tenants’ costs of moving home. If you’ve signed a tenancy since June 2019 and paid more than five weeks’ rent as a deposit then you are protected.

“But deposits remain a large barrier to moving, making it hard for tenants to move out of an unsuitable property and putting tenants who face eviction at risk of homelessness. Renters who lack savings need a way of transferring their deposit from their current tenancy to the next one without being ripped off with a poverty premium.

“As the government finalises its Lifetime Deposit proposals it must standardise and speed up the deposit disputes process, which currently allows unscrupulous landlords to waste tenants’ time with spurious claims.”