Deposit/Bond – Paper Guarantees?Make Text Bigger
I am hoping to create a Deposit Guarantee Scheme, “Choice Deposits”, whereby the prospective tenant would have the option of paying an extra amount of rent, instead of paying a deposit, and the landlord would pay that extra amount of rent charged to Choice Deposits in exchange for a paper bond (deposit guarantee). I think this would perhaps be in £500 increments, e.g. for every £500 deposit guarantee, the tenant pays an extra £15 pcm rent.
Benefits for tenants:
This would give tenants a choice whether to pay a cash deposit to the landlord, or pay extra rent (ongoing) as an alternative.
It may enable the tenant to use their money for furniture or other things, rather than it being held as a deposit.
It can also assist tenants to budget more effectively.
It also gives low income tenants access to tenancies that would otherwise be unavailable.
Benefits for landlords:
They can offer the property to a wider range of potential tenants, so may be able to let the property sooner and reduce their void periods.
They have the reassurance of a rent/damage guarantee.
They can negotiate between themselves and the tenant what amount of deposit guarantee they want, and what amount the tenant is willing to pay for.
There is no penalty or fines imposed for failing to protect a deposit, as there is no actual cash deposit, only extra rent charged, (it is the landlord that has the protection of the deposit guarantee).
It is cost neutral (free) to the landlord, as they add the cost on to the rent charged to the tenant (with the tenant’s consent).
It can work for any type of tenant, from DSS to high income professionals.
It can work for any amount of deposit required (in £500 increments), and it is not affected by the government plans to limit deposits to the equivalent of one month’s rent.
It enables landlords to have an extra level of deposit guarantee for tenants with pets.
The final details have not been fully worked out yet, but at this stage I would appreciate some feedback from landlords (and tenants), and perhaps also initial expressions of interest from landlords, so that I can further assess the viability of the deposit guarantee scheme.
Choice Housing Ltd
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