A new Client Money Protection deal between an insurance specialist and a letting agency trade body is claimed to be a first for the industry.

It means that for the first time consumers will be able to claim back every single penny of their money if the agent steals or loses it. Until now, policies have capped the amount that can be reclaimed.

With the new policy a landlord who is out of pocket, for example, to the tune of £50,000, would be able to claim all of it back – instead of perhaps half.

Tenants who have had their deposits misappropriated would similarly be able to claim the full amount, after a new deal between the UK Association of Letting Agents (UKALA), a spin-off from the National Landlords Association, and Let Alliance.

The new partnership comes in advance of a raft of changes for the private rented sector including the Government’s intention to introduce compulsory CMP insurance for letting agents.

The ‘total loss’ CMP, available only to UKALA members, is underwritten by insurers Hiscox.

UKALA chairman Tim Clark said: “We have worked with Let Alliance to deliver a distinctive CMP proposition ahead of the Government’s decision to make it compulsory in England, and it provides all of our members with a market differentiator and unique selling point.

“It also means that only UKALA agents will be able provide landlords and tenants with the assurance that their money is completely protected. We have started contacting our members about the announcement with more detail about what it will mean for them.”

Andy Halstead, founder and CEO of Let Alliance, said: “Our strategic relationship with UKALA provides their members with access to CMP that isn’t available to anyone else in the market.

“It also means that Let Alliance’s customers can start to benefit from UKALA’s unique relationship with the National Landlords Association, which offers unrivalled networking opportunities and access to a network of around half a million properties.

“We’re looking forward to working with UKALA’s members to discuss their business needs and how we can work together to support them through changing times, focused on increasing revenue and wherever possible reducing costs.”

UKALA is far smaller than ARLA or NALS, with just 702 members, and has so far had a much lower profile.