While deposit replacement schemes aren’t new, there has been an upsurge in interest in recent months. As more products reach the marketplace, awareness grows, and landlords are keen to explore their options.
Recent changes in the letting industry have encouraged many landlords to review their options. The Tenant Fees ban has considerably changed the landscape for many landlords. With so many fees removed from a landlord’s activities, there is a greater need to obtain value for money.
Even the five-week cap on security deposits influenced landlords to review their options. No matter the level of experience a landlord has, the times are changing and letting industry professionals need to stay up to date. There are benefits for landlords of a deposit replacement scheme, and these features may be ideal for many landlords.
This scheme helps you reach more tenants
The deposit scheme enables landlords to reach more people and will make the rental accommodation more appealing. This step should be of benefit to many prospective tenants and can speed up the letting process for landlords. If you’re a landlord left frustrated in moving tenants into the rental accommodation, this feature is of benefit.
Tenants also benefit from the new options
As a landlord, you should look for options which please tenants. When you have a happy tenant, they are likely to stay for longer, and they’ll be more likely to maintain the condition of your property.
Studies indicate, based on average rent in the United Kingdom, tenants can save more than £1,000 on the initial costs of moving into a rental property. The high costs of the initial rental period is a barrier to entry for many tenants. The removal of these high costs should increase demand from tenants for rental accommodation.
Naturally, some landlords are wary of this new scheme. There are many letting industry professionals who believe deposit replacement services encourage tenants who can’t afford a deposit. This is a worrying prospect for some landlords.
However, the scheme is more about people using their money more effectively, as opposed to being an indicator of income. In the longer-term, this scheme defers payments, so tenants still have to pay, which hopefully provides landlords with greater confidence in the programme.
If you are a landlord looking for guidance or support, please contact Hunters. We are pleased to offer extensive landlord services, and we look forward to helping you.