New tenancies push half of renters into debt

Renting is now so expensive that it’s pushing two in five renters into debt if they want to start a new tenancy, recent research has found.

According to consumer group Which?, a staggering 43 percent of new tenants have needed to take out a loan, use their credit card or even borrow money from family and friends to fund their deposit. At the same time, the “double deposit bind” (where tenants have to find cash for their new deposit before having their previous deposit returned) has pushed 31 percent into debt, leaving them stressed and financially stretched.

Unsustainable

This model simply isn’t working, and the situation is only getting worse – not only for tenants, but for landlords too. As tenants struggle to find the money to get their deposits together, landlords’ properties are sitting empty for longer periods of time and costing them money too. It’s a lose-lose situation. No wonder Which?, housing charity Shelter and even landlord group the Residential Landlords Association (RLA) are demanding a radical shake-up of the traditional lettings model.

Rocio Concha, of Which?, said: “The number of people stretched financially to cover the cost of a deposit is a real cause for concern – and just one of many symptoms we found in our comprehensive review of a private rental sector that is failing millions of tenants and landlords.”

An altogether better alternative

Upfront deposits can vary around the UK, but the average deposit cost was £1,180 in March 2017, according to the most recent figures from the Tenancy Deposit Scheme. This fee, on top of the cost of physically moving house, and setting up initial bills, is proving prohibitive for a lot of new tenants, particularly young people.

Despite these gloomy figures, there is a solution at hand. flatfair, the simple, safe and affordable alternative to tenancy deposits, offers up a radical new model to free tenants from the burden of expensive upfront costs and offers landlords double the protection they receive under traditional deposit schemes.

Tenants register to become flatfair members and pay just one week’s rent plus VAT, split even across the household, as a one-off membership fee. At the end of their tenancy, they simply pay for any lawful claims, and they’re free to move on to their next home. If they want to negotiate or counter any claims made against them, they can communicate 247 with their landlord using the digital platform, and they have access to an Independent Dispute Resolution service should either party need it.

By letting their properties with flatfair, landlords can attract more tenants, let their properties quicker and therefore reduce the risk of their properties sitting empty for lengthy spells of time. At the end of the tenancy, flatfair will compensate them up to the value of 12 weeks’ rent (*though never more than six weeks’ rent arrears), with optional free recovery for any additional claims, and it’s totally free for landlords to sign up. It’s also completely safe, because flatfair is insured by an A-rated financial institution and works with government-authorised adjudicators.

Let’s make renting affordable

This, surely, is the future of renting, freeing tenants from the stress and financial hardship they can face when trying to pay hefty upfront deposits, and giving landlords double the protection and faster payouts, along with much-needed peace of mind.

There’s a better way of renting. As the fastest growing deposit alternative in the UK, we’re leading the way.