It’s a conversation that’s currently happening between landlords, letting agents and tenants across the UK, as deposit-free renting takes over from traditional deposit schemes for landlords.
If you haven’t already heard of an alternative to a deposit renting, it probably won’t be long before your tenant or letting agent mentions it. The scheme replaces the traditional security deposit with an insurance backed guarantee, which ensures that the tenant pays any unpaid rent, or expenses arising from damage to the property, at the end of a tenancy.
It may sound like a big departure from the tried-and-trusted method of committing cash to a deposit protection scheme, but many landlords have found that they are better protected with the Zero Deposit™ Guarantee than with traditional cash deposit, as the Zero Deposit Guarantee provides cover for up to six weeks’ rent instead of the usual five.
It doesn’t stop there. Landlords can enjoy a number of other benefits when they let with the Zero Deposit Guarantee:
Because the tenant buys the insurance (paying a non-returnable fee based on one week’s rent) giving you cover up to the value of six week’s rent. There’s less admin, less hassle and there's absolutely no cost to you.
Fewer void periods
As tenants no longer need to save the cash to pay for their deposit or wait for a previous deposit to clear, they can move in faster, cutting the time your property stands empty.
More potential tenants
Tenants in regular employment often seek houses to rent with no deposit due to temporary cash-flow problems, or because they can’t get help with their rent deposit. When you offer the Zero Deposit Guarantee, you’ll open the door to more applicants. But don’t worry: all tenants will be vetted, credit-checked and referenced in the usual way by your lettings agency.
Faster payback in the event of a dispute
No one wants a tenancy to end in dispute, but when disputes happen, landlords and tenants should feel supported. Under the Zero Deposit Guarantee, disputes are handled by The Dispute Service (TDS), a trusted, government-backed, independent dispute resolution service. If the case is decided in your favour, you’ll receive the money within two working days. That means you can get on with repairs (if any) and your next tenant can move in more quickly.
No hidden risks
Unlike many other no deposit schemes, the Zero Deposit Guarantee is protected by the Financial Services Compensation Scheme and its customers have access to the Financial Ombudsman Service. Insurance is provided by trusted brand Great Lakes SE, which is regulated by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) and subject to limited regulation by the Financial Conduct Authority and the Prudential Regulation Authority.
The Zero Deposit Guarantee offers a no deposit solution that works for everybody, so if the idea of happy tenants, less admin and better protection for your investment appeals to you, you can either talk to your letting agent or contact us direct.