With the ‘Tenant Fees Act’ limiting the level of deposit landlords and agents can take, the concept of deposit free renting is looking more attractive for renters. Contrary to popular belief, deposit free renting does not mean you as the landlord do not hold a deposit. Instead, you have an ‘insurance’ product that is the equivalent of 6 weeks rent which is more than the impending 5 week deposit cap. The idea is that the tenant pays a deposit replacement company a fee to obtain this insurance. We recommend Zero Deposit which is the only one FSCS regulated. The Residential Landlords Association has been working with Zero Deposit to develop a trusted supplier relationship. Any disputes go through them and are adjudicated by the TDS.
The best part is that claims are paid out in a matter of days instead of the 4 – 6 months time span we have seen with the DPS recently. The most common question we get is that landlords think the quality of the tenant will change if they opt for this, but this is not the case. They still need to pass the same criteria as they would have done so if they paid a deposit.
Jon Notley, CEO of Zero Deposit explains, “Our objective was to ensure that when a landlord asks: ‘is it as good as a traditional deposit’ the answer had to be yes.”