Over half of renters who choose a deposit alternative are funding their moves with money saved by not having to pay a five week cash deposit, it’s being claimed.
Reposit’s survey of over 1,500 tenants shows 55% were using the cash to help towards moving costs such as buying furniture. Nearly a quarter (23%) put the money into savings accounts, 4% invest elsewhere and 7% repay debts.
The typical cash deposit is now £1,292 and rents now average £1,122 a month claims Reposit, whose chief executive Ben Grech says: “Moving is expensive and many tenants do so having just paid a new deposit of over £1,000 while waiting for their previous lump sum to be returned, leaving them struggling. [We’re] helping to solve these kinds of affordability problems faced by tenants everyday, providing the financial breathing space they need and allowing them to get on with their moves.
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Unlike a cash deposit, there is no hope of getting your money back with one of these new types of deposit! At the end of the day it is a more expensive than a traditional deposit.
I would have concerns about overall affordability if someone couldn't float a second deposit for 2 or 3 weeks. Are they living beyond their means? Why haven't they got sufficient overdraft available? If they're not confident they will get back their existing deposit it's a bit of a red flag.
The deposit alternative schemes seem to be an expensive option and there is virtually no chance of the remainder of the deposit gaining anywhere close to the cost in interest.
I sometimes accept a deposit bond from the Council but that's a bit different. That's for housing someone from one of their schemes. I go in with eyes wide open and know they are on UC and will have every benefit, grant and cost of living handout thrown at them to set up a new home.
Once I did a deposit bond from the Council and never again. Refused to accept that their breeder on benefits could have caused any damage. 😠 In the end my client landlord and I could not argue any longer and I was instructed to give up. ☹️
He then sold up. Well done NSDC. 😡
I only rent to working people, and working people ought to be able to save up a few hundred, despite what Kier Starmer says. People on benefits might have no savings because benefits should only be a safety net until they get a job. Yes I know, I am in cloud cuckoo land.
Benefits as a safety net. Such a quaint, outdated, old fashioned view! We need to keep up with the times!
No deposit= no tenancy, simples
I would be very wary of a tenant who couldn’t meet the deposit. I would see it as a sign of future late rental payments. Fortunately I have plenty of applications who have no problems.
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