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56% of tenants are selecting deposit alternative products over paying a traditional deposit when offered the two options side by side. Furthermore, when a tenant chooses a deposit alternative, landlords are protected for up to 10 weeks worth of damages and/or rent arrears while agents earn revenue from every deposit alternative plan selected by tenants.
Offering deposit alternative products such as flatfair No Deposit is an easy win for agents who want to improve their bottom line, attract more landlords and tenants, and offer more choice.
What is a deposit alternative?
A deposit alternative is an option offered during the tenancy application stage to tenants as an alternative to traditional deposits. Instead of paying a large cash deposit, which often amounts to five weeks worth of rent, tenants pay a smaller, one-off fee of one week’s rent (+VAT).
At the end of tenancy, tenants remain just as liable for any charges as they would be with a traditional deposit, however if the charges exceed the five weeks rent, deposit alternatives provide further protection for landlords.
Deposit alternatives are relatively new to the lettings industry but are rapidly growing in popularity. At flatfair, more tenants are choosing No Deposit over a traditional deposit than ever before, and far more landlords are willing to offer it as an option on their property due to rising levels of rent arrears.
Why are deposit alternatives important?
Deposit alternative products aim to reduce the financial burden on tenants when moving into a new rental property while still providing landlords with protection for damages or unpaid rent.
With the cost of living continuing to impact tenant affordability, offering a choice of deposit options is now a necessity. At flatfair, our aim is to ensure every tenant has the choice to lower their upfront move-in costs when securing their new home, while ensuring the landlord’s property is protected.
Holly Birmingham at Native Residential - The Almere explains why offering a deposit alternative during the cost of living is crucial:
Win-win-win
With deposit alternative products, all parties benefit significantly. Landlords find them attractive as they increase their protection and reduce their risk of lost income, while tenants appreciate the flexibility and reduced upfront costs associated with moving into a new rental property. Lastly, agents are increasingly offering a deposit alternative such as flatfair No Deposit, because they generate revenue on every deposit alternative plan their tenant chooses.
Interested to know how your agency could benefit from offering a deposit alternative product? Book a call today.
