What is a deposit replacement scheme?
Did you know? Over £5.2 billion was held in registered tenancy schemes in 2019 with the average rental security deposit standing at £1,139. Monies that sadly sit in accounts and could be more effectively used in circulation within the economy.
Ashington Page are continuously seeking ways to improve its services across the board of clients and their specific needs. Over the past couple of weeks we have been talking to deposit alternative schemes and hoping to introduce them to Landlords who may wish to further protect their properties from damage and rent arrears, other than that of the traditional 5 weeks capped deposits* (*six weeks for tenancies of £50,000+ p.a.).
In turn, Tenants who struggle to pay deposits and often require the need to borrow in order to move from one rental to another rental property, will have more choice.
Deposit free renting comes in many forms, the one that we work with is “flatfair” (a non-insured option) – flatfair effectively “buy” the liability of the tenant to pay the deposit, whereas Goodlord sell your tenant an insurance policy which will cover their deposit obligations in the tenancy.
Why do you need a deposit replacement scheme?
Some of the advantages of using a No Deposit Option:
- Removing the need to find a large deposit increases the pool of potential tenants for your property.
- Not having to wait for a deposit means it should take less time to move the tenant into the property.
- It would mean fewer void periods as this option makes it easier to check the tenant out at the end of the tenancy.
- There is also an argument that the insurance aspect of the no deposit schemes gives the landlord greater financial protection than the traditional deposit.
- It is also a fairer option, for longer term tenants to move from one property to their next home, without doubling up on the deposit sum for their second home, whilst awaiting the return from their first rental.