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Deposit alternatives are relatively new to the market, but are skyrocketing in demand with both tenants and landlords. This is because they significantly reduce upfront move-in costs for tenants and provide extra protection for landlords in the event of damages or rent arrears at the end of tenancy.
The level of benefits, however, can vary depending on the provider chosen.
Protection for landlords
With traditional cash deposits, landlords typically receive up to 5 weeks' rent for damages or unpaid rent. If costs exceed this amount, landlords must attempt to recover these themselves, which can be challenging and often unsuccessful.
Deposit alternatives offer additional protection to landlords, often at no extra cost:
flatfair No Deposit stands out by offering up to 10 weeks of protection to landlords, which is double that of a traditional deposit. Furthermore, if charges exceed the 10 week limit, flatfair has a designated collections team to ensure a full and swift recovery of money owed to the landlord.
Costs to tenants
Until the emergence of deposit alternatives, tenants would be required to pay a traditional cash deposit which usually amounts to 5 weeks worth of rent. Given the cost of living crisis impacting tenant affordability and the need to provide a stand-out offering, more agents than ever before are deciding to offer deposit alternatives to support their tenants by significantly reducing their upfront costs.
When opting for a deposit alternative, tenants pay a non-refundable fee at the start of their tenancy. Some providers charge annual or renewal fees if the tenancy lasts more than 12 months, but flatfair No Deposit only requires a one-time payment. Here’s a comparison of costs:
On average, flatfair tenants save approximately £1000 on their upfront move-in costs, which allows them to allocate funds for the more important things in life, such as funding a deposit on their own home, or going on a much needed holiday.
Just as they would with a traditional deposit, tenants remain liable for any damages or unpaid rent when using a deposit alternative. These charges are settled at the end of tenancy, similar to using a hotel.
At flatfair, all charges can be easily raised and negotiated on our high-tech platform, with specified time periods to ensure landlords can quickly reinstate their properties ready for the next tenants to move in.
Full deposit management
flatfair are the only deposit alternative provider to also administer traditional deposits for agents. This saves agents up to 60 minutes per tenancy, as we instantly collect the deposit payment and register it with their preferred scheme. As flatfair partners with the major deposit schemes, agents do not need to change their existing supplier.
By doing so, agents also improve compliance by removing the risk of human errors and missed deadlines during registration and reconciliation. Such deposit errors can be worth up to three times the deposit amount.
Interested in learning more about our market-leading deposit alternative and the benefits to your business? Book a no-obligation call today.
