flatfair, which lets landlords offer deposit-free renting to tenants, has defended nil deposit schemes as an alternative to a traditional deposit, following the publication of a BBC News online feature yesterday criticising deposit alternatives.
Although flatfair was not the subject of the piece, a spokesperson for the London-based fintech describes the deposit-free renting sector as a “nascent industry” and is keen to ensure the firm’s voice is heard and that people do not “incorrectly assume all providers are the same”.
“The BBC article was factually correct but chose only to include negative case studies,” the spokesperson added.
Instead of taking a deposit, flatfair’s service allows landlords and agents to ask tenants to pay a one-off fee – equal to the value of one week’s rent – which in turn offers residential landlords up to 12 weeks protection and a free debt recovery option for any additional claims.
Many letting agents have welcomed the opportunity to offer tenants an alternative to up-front deposits and believe the pay-as-you-leave approach brings several benefits to both tenants and landlords.
Landlords considering working with flatfair should be aware that the scheme is insured by an A-rated financial institution and works with government-authorised adjudicators.
flatfair’s spokesperson continued: “It is key that consumers need to be able to make informed choices, especially in an industry which is still in its infancy. What needs to be made crystal clear is that there is a key difference between insurance solutions charging tenants excessive or recurring fees and payment technology companies like ourselves who offer tenants a transparent one-off fee without hidden costs.
“From the outset, we offer a clear sign-up process where tenants have to agree to statements making it clear of our offering, including the fact that the membership is non-refundable and is an optional alternative to a traditional deposit.“
“The BBC article refers to insurance solutions, which despite being FCA regulated are being mis-sold. Some insurance solutions count estate agents among their investors, which removes any sense of independence. Rather than being an insurance product, flatfair is independent and built upon the latest payment technology which means tenants can rent their home through just their debit card – in much the same way as you would checking into a hotel.
“Although flatfair was not the subject of the piece – and was not used by the customer featured – this highlights the importance of our missing to drive a fairer, more transparent and accessible rental market that everybody trusts.”
