Zero Deposit is the only deposit replacement product worth considering in the market, according to the Residential Landlords Association (RLA).
The landlord association is endorsing Zero Deposit after entering a new agreement with the deposit replacement firm.
Zero Deposit’s tenant’s deposit replacement product is rapidly becoming a major part of renting for letting agents, landlords and tenants across the UK.
A number of letting agents are now signed up to Zero Deposit’s FCA-regulated deposit replacement product, designed to reduce financial pressures on renters, while also offering greater security to landlords.
The insurance policy is underwritten by Great Lakes Insurance SE, part of the Munich Re Group, which the tenant acquires for a one off payment at the equivalent of one week’s rent, no matter the length of the tenancy, plus an annual admin fee of £26.
Under the terms of the scheme, tenants remain accountable for any damage or unpaid rents, with any disputes over claims by the landlord handled by the Tenancy Deposit Scheme (TDS), which has an exclusive partnership with Zero Deposit.
Jon Notley, co-founder and CEO of Zero Deposit, commented: “Since launching in February 2018 our deposit replacement guarantee has proven to be incredibly popular with both landlords and tenants - with several thousands already signed up.
“In May alone we have covered more than 1,750 tenancies, providing more than £2m in deposit cover to landlords. By working with the RLA we hope to build on this success and increase awareness of Zero Deposit to its growing community of landlords.
‘We also welcome the RLA’s decision to partner with a product that is fully regulated by the FCA, with safeguards in place for both landlords and tenants.
“We have recently witnessed other deposit replacement providers enter the marketplace, some of which do not offer the protections of FCA regulation and who are, in our view, opening up this new market to risks of mis selling and ripping customers off.
“As deposit replacement increasingly becomes the norm for renting in the UK, we urge Zero Deposit is a trading name of Global Property Ventures Limited registered at Business & Technology Centre, Bessemer Drive, the industry and customers to insist on only embracing products that offer all customers the safety net of FCA regulation, with protection under both the Financial Services Compensation Scheme and the Financial Ombudsman Service.”
The RLA currently has more than 35,000 members and represents the interests of landlords in the private rented sector across England and Wales.
Andrew Dixon, chief executive of the RLA, said: “With the average deposit now more than a thousand pounds, deposit replacement products are growing in popularity with both landlords and tenants.
“Our new partnership with Zero Deposit will allow us to extend this alternative option to our members alongside our traditional deposit protection scheme.”