Many housing associations already offer deposit free renting in a lot of cases for their social rent and affordable rent properties. What about market rent?
Housing associations venturing in to market rent
In recent years there have been a number of housing associations venturing in to the market rent sector competing with estate agents and private landlords. Typically all will take a security deposit to secure a property.
So why do they take a deposit? It is to protect them in the event they need to make repairs following the end of a tenancy, or it can even be used against unpaid rent. However, is this all about to change?
Is deposit free renting an option for market rent properties?
There are have been a number of new products that are appearing in the market which suggest there will be no need to charge a deposit to secure a property. Typically they are insurance based products. Those on offer seem to vary. In some cases the landlord would foot the bill, whilst other products would charge the tenant instead.
There are those who argue that in the majority of cases tenants get their full deposits back, so why would they want to pay out for an insurance based product? On the other hand, why would landlords want to pay out for an insurance product when the onus is on the tenant to ensure they keep the property in good condition and pay rent on time?
Deposit protection scheme or deposit free rent insurance policies?
These are good ideas for deposit free renting, however they will need to be carefully thought through to decide if this is a route you want to go down when dealing with market rent properties. Or you stick with the current solution where you take a deposit that is held in one of the protection schemes.
It is entirely understandable why there are new products entering the market. It can be a lot of money for people to find if they need to pay a security deposit and in most cases a month’s rent in advance. However, it could prove attractive to go for one of these new insurance products if it means less outlay upfront for prospective tenants.
So whilst deposit free renting is already offered by most housing associations with their social rent or affordable rent properties. Will it be something that will become more popular for the market rent product? That remains to be seen.
