When you rent through a deposit replacement scheme, the traditional cash deposit is replaced by insurance. Deposit-free renting provides extra protection for landlords and gives tenants access to money that would usually be locked away until the end of their tenancy. Because there’s no need to register a cash deposit with a deposit protection scheme, it saves admin time and cuts much of the hassle and financial pressure people experience with renting. As with any normal tenancy agreement, tenants must pay for any unpaid rent or damage to the property when they finally move on.
Under the Zero Deposit Guarantee, landlords no longer need to collect a cash deposit and place it in a deposit protection scheme. Instead, they are protected by insurance cover to the value of six weeks’ rent (one week more than they could expect under a normal cash deposit arrangement). In the event of a dispute, our expert evaluation partner The Dispute Service (TDS) will be called in to make a judgment based on evidence submitted by both parties.
Zero Deposit was co-founded by Zoopla’s former Commercial Director, Jon Notley, with the aim of making renting more affordable, faster and fairer. The Zero Deposit Guarantee scheme replaces the traditional cash deposit with insurance, paid for by the tenant. The landlord is covered against financial loss by a sum that is the equivalent of six weeks’ rent. We are authorised by the Financial Conduct Authority (FCA) and partnered with by insurance industry leader Munich Re. End-of-tenancy disputes are handled by The Dispute Service (TDS), an independent, not-for-profit organisation that provides expert dispute resolution services.
For tenants, deposit-free renting frees up money that would otherwise be locked in a deposit protection scheme, leaving them free to spend the cash as they want. For landlords, the Zero deposit scheme reduces admin time and provides greater protection, as they are covered for six weeks’ rent instead of the usual five. Tenants no longer have to fund large deposits, so they can move in more quickly, reducing void periods for landlords. Letting agents can better protect their landlords through Zero Deposit, and can also register more applicants, attracted by the benefits of no deposit rental properties.
The tenant pays an initial, non-refundable fee, equivalent to one week’s rent, followed by an annual admin fee of £26 (Zero Deposit guarantees to cover the same property at this annual sum for up to 10 years). Multiple tenants take out a joint Zero Deposit Guarantee and share the cost of the fees, together with any payment due to the landlord under their Assured Shorthold Tenancy Agreement. The landlord pays nothing toward the cost of the Zero Deposit scheme.
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