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Renters could save money by removing ‘unnecessary burden’ of rental deposits

When renting a property out, landlords and letting recognise that it is important to take a deposit from the tenant and place it in a government-backed tenancy deposit scheme as protection to ensure that any potential damage or unpaid rent at the end of the tenancy is covered. 

But raising enough money for a deposit can be a real challenge for many renters under the existing deposit system, with tenants sometimes having to wait weeks to get their deposit returned or having a battle to get charges or financial deductions removed, and not always successfully as deposit disputes don’t always go their way. 

It is therefore perhaps unsurprisingly that there is growing appetite for deposit-free renting, with a YouGov survey finding that almost half of renters would prefer to see tenant deposits scrapped and replaced with deposit protection insurance that pays for any damages to the property at the end of a tenancy. 


Deposit-free renting provider flatfair has produced a tube map looking at upfront costs saved around each tube station by analysing mean rents. 

From this, deposits of five weeks were calculated and the flatfair membership fee, equal to roughly one week’s rent plus VAT. The difference between these amounts is the average saving on upfront costs.

Instead of taking a deposit, landlords using the service provided by flatfair can ask tenants to pay a one-off fee - equal to the value of one week’s rent - to join flatfair, which offers residential landlords up to 12 weeks protection and a free debt recovery option for any additional claims.

Using flatfair to secure a rental property across the capital’s tube zones 1 to 6 would, the company claims, save Londoners on average £1,554 in upfront costs, almost equivalent to the capital’s average monthly rent of £1,665. 

The tube station with the highest savings is Hyde Park Corner, where renters can save a massive £5838 on their upfront costs. 

Victoria, Tottenham Court Road, Great Portland Street and Gloucester Road, rounded out the top five, with each offering savings of over £4,000 for renters in upfront costs. 

For zones 1 and 2, Londoners would save £2,631 and £1,871 on average, respectively. 

Travel Zone

Average Savings with flatfair membership













Franz Doerr, founder and CEO, flatfair, said: “As more people rent in London than ever before, we need to remove the unnecessary burden of traditional rental deposits. 

“There’s over £5bn in rental deposits locked away when there is absolutely no need. Our cutting edge payment technology can help free this money up, putting it back into the hands of tenants who can save, invest, or spend that money how they see fit.”

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    No deposit means no lease in my properties. Next more financially responsible prospective tenant please. Teach the snowflakes to save for things worth having and they might even end up with a big enough deposit to buy their property!

    These no deposit schemes only benefit the people providing the chargeable service. Good tenants can easily get their full deposit returned to help build the deposit needed for purchase, with the only cost being loss of 0.00000001% interest, usually less than one costalot coffee.


    A very good set of points there Robert. I too am very sceptical of these deposit replacement products as they always involve a non-returnable charge to the tenant. At least with Landbay you only pay once, but then you are limited to landlords that are on their books and the landlord will be having to pay their service charges as they are presumably acting as the letting agent as well (I self-manage all my properties).

    The whole point of a deposit is that is is fully refundable (for a good tenant). Unfortunately there are cases a-plenty of unfair deductions taking place for hapless tenants who can lose tens or even hundreds of pounds at a time.

    I think as landlords we need to be sympathetic to tenants who don't have the money upfront, for example after a relationship breakup where the person having to leave may be left with little more than the clothes they are wearing even though they are in long term employment. Or someone who has just got a job and is therefore still building up their finances.

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    • 30 December 2019 11:08 AM

    If there was a method of getting rid of rent defaulting tenants 14 days after first rent default most LL wouldn't bother with any deposit.
    It is the pathetic dysfunctional eviction laws that make most LL insist on deposits.

  • James B

    I wonder if the rentflakes will not have to leave a deposit for a hire car or a holiday booking or any of the many other services requiring a deposit soon ?

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    As a Landlord my belief is "If you can't raise 5 weeks deposit, you can't raise the next months rent". Good tenants won't be interested as they get their 5 weeks deposit back at the end of thier tenancy.


    Agreed, and I would not trust these insurance based schemes to pay out in the event of a claim.

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    • 30 December 2019 20:02 PM

    It really is a bit of a cheek to expect someone in this case a LL to handover effective control of a very very expensive asset for even just 5 weeks deposit.
    Anything less would be just taking the biscuit!
    The eviction system very effectively prevents LL from recovering a property from a rent defaulting tenant in the first 6 months of a tenancy.
    Yes you could attempt using a S8 process but I doubt many LL have been able to evict a tenant within the first 6 months of a tenancy.
    Once in all a tenant has to do is pay the first rent payment.
    If no deposit is paid the tenant could have up to 10 months of free accommodation as it takes that long to evict.
    The current eviction processes are an effective Rent Defaulters Charter.
    The PTB really fail to understand the system is inherently in favour of the tenant.
    Even 2 months rent as deposit was inadequate for the risks taken by the LL.
    Until the PTB understand the ridiculous eviction process is causing many more LL to be far more selective as to who them let their properties to there will continue to be increasing homelessness with many LL choosing to keep properties empty until a decent tenant may be sourced.

  • James B

    Landlords need to go the extra mile and get a CCJ on a defaulter this helps figure landlords and the sector as a whole , providing landlords do they’re due diligence and check them properly


    I do, as a matter of princible, £60 online money claim, very unlikely to get the money owed, but the satisfaction of giving the defaulting tenant a ccj is worth it.

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    Its just anything & everything to destroy Private owner Landlord operate, they complain about the quality of housing / the cost of housing yet the so called regulators have taken & continue to take hundreds of millions of £'s out of the sector by licensing, fines, penalties, confiscation orders, maybe £4k expenses for a Council member to trot along to Court for a couple of hours. It seems to me & well documented there are over 170 pieces or legislation governing our business, that says it all ,we are burdened to the utmost. However, notwithstanding that they want more like in Queens speech no less we another mammoth book of rules coming as if we didn't have any namely The Renters 'Reform Bill' try reading that but get a health check first or you might not live to the end not that anyone has yet to mention the LL's well being of care.

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    Sorry I forgot a minor incidental its just the Billions of £'s taxes to the eye balls we pay. Happy New Year.

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    I also wonder how would a tenant taht has continually cost an insurance company go on. Would they still have to pay the same fee as tenant that hasn't cost th einsurance company a penny? If their premium goes up to reflect costs then soone ror later it get to point where they can't affprd the premium., If it doesn't go up its rather unfair on thsoe tenants that never cost the insurance company anything because there are no claims to be settled.

    As for Mr Franz Doerr remark in the above article "remove the unnecessary burden of traditional rental deposits", he would say that as his business is built on this insurance. As his quoted fees reveal he's not doing this for nothing he's making a profit from it. Does anyone think he'd be doing this if he made a loss from it.

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    • 31 December 2019 22:39 PM

    LL suffer losses of over £9 billion per year on average.
    Very few tenants qualify for RGI.
    There are reasons for that.
    Basically the RGI underwriters don't want to lose their shirts; and who can blame them!?
    Consequently they have fairly strict criteria.
    Once these deposit schemes start suffering claims they will realise the business model is fundamentally flawed.
    £9 billion is a lot to be covered by relatively paltry deposit insurance premiums.
    As long as the eviction process remains as dysfunctional as it currently is and scheduled to get even worse then these deposit schemes are guaranteed to fail.
    You can bet they are all Ltd which means no liability for the owners when the claims inevitably exceed premium income etc.
    These schemes are guaranteed to fail leaving the LL with no deposit to call on.
    Personally I will continue to take no more than 2 months rent as deposit.
    So 5 weeks at the commencement of the tenancy with the remainder paid over the following 5 months.
    After 6 months I will be adding an Appendix to the AST reducing the rent for the next 6 months on the SPT.
    The reduction might reduce by an amount equivalent to 3 weeks rent.

    When the tenant vacates subject to everything being OK the deposit would be returned along with a 'goodwill' gesture probably for an amount equal to 3 weeks rent!!!
    No 'goodwill' gesture could ever be proven to be any part of a deposit.


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