Deposit free renting to change private landlord lettings
So what is deposit free renting? ‘Deposit free renting’ is a new initiative aimed at the private lettings market. The notion is that it will help prospective tenants move into a property without having to handover a large sum of money.
Having previously been the reserve of housing associations, private landlords can now partake in letting a property deposit free. Further, landlords will actually have more protection.
Here’s a quick breakdown in 5 of deposit free renting
- An annual insurance policy is taken out. Either by the tenant, private landlord or letting agent depending on the scheme.
- The landlord is covered for damage, loss in rent and rent arrears amongst other items. Again, depending on the provider.
- The insurance costs less than a typical deposit would upfront.
- The schemes offer a thorough tenant vetting service. Some schemes have a rating option so landlords can leave feedback as to whether they would recommend the tenant again.
- With some of the deposit free renting schemes on offer tenants can improve their credit files.
Private landlord DSS accepted with No Deposit?
In the past, had a DSS tenant searched for private DSS landlords where no deposit is required, they would have returned very few, if any, results. The deposit free renting option certainly looks set to change that.
In summary, it does sound like all parties benefit. In particular those tenants who have been unable to rent due to cash flow. However, there are important points to consider. For example, if the tenant is a long term renter, will they be paying more over time than they would if they had paid a deposit upfront? Or, in relation to the schemes where the landlord pays, this is an additional cost. Is it right for them?
Whatever our conclusion, these products are certainly starting to hit the rental market with the likes of Zero Deposit, Flatfair and Canopy making waves.
Find out more about the no deposit rent options for landlords and tenants that are currently available.
If you are an agent offering an alternative to the traditional deposit such as those outlined above and would like to add your properties on an extended free trial to our No Deposit section please get in touch.
