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. 

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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