The huge sums involved in tenancy deposits has been revealed by new research which shows that last year, just over £5.2bn was held via authorised schemes.
The average tenancy deposit was £1,139.
Had the £5.2bn been in circulation, it could have been used for investment in business, property or support services, it is argued.
For example, the £5.2bn could have boosted overall business investment – which stood at £198bn in the UK last year – by 2.6%.
The amount also exceeds investments into sectors including oil refinery, forestry and fishing, hotels and restaurants, and health and social work.
The number crunching has been done by Ome, the newest provider of tenancy deposit replacement products.
Co-founder Matthew Hooker said: “It’s quite astonishing when you consider the total sum used as rental deposits across the nation and especially when you compare this with investment into the UK.
“It really puts into perspective just how much money it actually is.
“To think it exceeds the annual investment seen in a number of UK business sectors, and is nearly 3% of total UK business investment in the last 12 months, is remarkable.
“Of course, we appreciate that these unutilised tenant funds are unlikely to be ploughed into the UK business sector via investment if they weren’t tied up, but it does demonstrate the huge sums being held by landlords and agents and the sheer size of financial security the nation’s tenants must collectively put down when looking to rent.”
Ome is sister company to Hamilton Fraser’s MyDeposits, which does take traditional deposits from tenants.