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Deposit free renting could be a ‘benefit to landlords’, says anti-deposit campaigner

With Universal Credit problems forcing a growing number of claimants into destitution and rent arrears, anti-deposit campaigner Ajay Jagota is urging more buy-to-let landlords and letting agents to consider the benefits of deposit-free renting.

Figures from last week’s BBC Panorama show tenants claiming Universal Credit - which replaces six working age benefits - have more than double the rent arrears of those who have yet to move to the new benefit system, presenting fresh problems for many landlords and letting agents.

A survey of Universal Credit claimants in every local authority area where the changes have been implemented shows they owe their landlords £662.56 on average, compared with £262.50 for those on traditional housing benefits.

The data also suggests that evictions have increased by 55% in just one year in areas when Universal Credit has been implemented.

The Citizen’s Advice Bureau last month reported that the number of renters seeking advice from them relating to rent arrears has risen by 47% since the rollout of Universal Credit began.

The government plan is for almost seven million people to be on Universal Credit by the end of 2023, but the new system has been hit by delays, which is why the new Work and Pensions Secretary Amber Rudd yesterday conceded the system “can be better”.

However, despite Rudd’s pledge to “learn from errors” and “adjust” the new system, Jagota, managing director and founder of zero deposit rent provider Dlighted, expressed his concern.

He said: “There’s a lot to be said for Universal Credit’s intention of making our benefits system simple and fairer, but there’s no getting away from the fact that its implementation is yet another thing that landlords and letting agents alike have to come to terms with.   

“The deposit protection industry tells us that old-fashioned tenancy deposits are the only way to keep yourself safe from rent arrears – but in reality they only cover you for a month of rent arrears. What happens if you’re owed two months rent? Or three months?

“All the evidence suggests that there is a strong link between Universal Credit and rent arrears, and if deposits won’t protect you if your income is hit when Universal Credit arrives in your area.

“Deposit free renting is something which could be a real benefit to landlords and letting agents who find themselves faced with rocketing arrears following the rollout of Universal Credit in their area, offering them hundreds of thousands of pounds of protection against unpaid rent, property damage and legal fees, while also making it easier and quicker to find new tenants if eviction becomes unavoidable.”

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    No surprise a deposit insurance provider campaigning for no deposit!..
    tenants need to pay a deposit for a multitude of reasons
    If there is demand for a landlords property from tenants who can afford a deposit why on earth would a landlord not want to take one

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    I am sure there are many Landlords out there who will be happy to have 'no deposit held' for dilapidations! ...NOT. I think some people forget that the deposit is not held for rent arrears, it is there for end of tenancy issues such as damage or cleaning, replacement if items etc and the Deposit Protection Schemes are in place for that. If the Landlord wanted a rent protection there will be an insurance for that, so too Legals for Court costs. Some tenants think that once they move in then they can stop paying rent. Many HB tenants are better than well paid fully employed tenants. It should not be that 'an insurance can cover that attitude' runs first in the mind of the tenant. Perhaps the tenant is paying the premium as they should insure their rent? The Landlord shouldn't have to pay. Care needs to be taken in any event as there may well be fewer properties in the rental market once the Government tax changes hit home. Property numbers will drop, Rents will rise, tenant numbers will rise, the Landlord can then pick and chose who they want. You can hear it now...' I don't want a tenant on benefits!' An awful lot of care needs to be taken with the rental market to protect all sides.

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    Have rent Protection Only.Don't bother with Damage, Clean protection etc, if it goes to dispute Ajudicator even when presented with Inspection reports, Inventory, Check in and Check Out report plus photos of before and after will still favour the tenant, even for not reporting water leak between Inspections causing damage to ceiling and walls Mould and damp.
    So double rent in first month keeping the 1 month for Cleaning Damage etc if need be and if left how it was when they moved in other than Fair wear and tear then refund. Simple rules, not complicated and if new tenant doesn't like then dont sign them up.

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    I wonder if Ajay or Dlighted would like to stand as Guarantors for those tenants that don't have a deposit ? ;-)))

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