Offering a deposit replacement scheme can help boost tenant viewings by a quarter, an agent claims.
East Sussex-based agent Oakfield said it has seen a 26% boost in tenant and prospect views on its properties that offer a deposit replacement product as part of the package compared with those that don’t.
Oakfield, which uses the Zero Deposit scheme, analysed data collected on its rental stock over the three-month period of September to November 2018 and found the click-through rate for its properties through Zoopla that offered Zero Deposit was 26% higher for one-bedroom properties than those that didn’t.
Neil Newstead, owner of Oakfield, said: “Without a doubt, offering an alternative to traditional deposits has made our properties more attractive to potential tenants.
“But this goes way beyond the clicks. In signing up to Zero Deposit, we have also been able to speed up the moving process which we are finding is having a positive result to both tenants and landlords.”
Ben Harris, sales director of Zero Deposit, said: “At a time when the deposit process is being reviewed as part of the Government’s Tenant Fees Bill, this data endorses that there are alternative and existing options in the market that can add value to every party in the chain.
“Whether that is improving the appeal to tenants by reducing financial outlay, increasing prospective custom for agencies and landlords, or simply providing the landlord with the level of security they have become accustomed to through a fully regulated solution.”
I have been watching the space for a while now and know the major providers – just a few questions for clarification:
What happens in case a landlord claim exceeds the 6week guarantee limit? I note that you don’t offer more protection than some of the other schemes, neither free recovery for addition claims.
What is your current uptake on landlords? Don’t really see any tangible benefits for landlords (faster turnover not convincing enough, just my personal opinion)
Do you offer tenants/landlords the option to convert existing deposits into ZDS?
What type of tenancy agreements are supported? Only standard ASTs or do you also support company lets and licenses?
Do you accept International applicants without credit?
Are you available outside England?
I have been working in regulated environments for many years. The fact that you are offering contracts of insurance (that’s what a financial guarantee is) through estate agents strikes me, since the risk of miss-selling financial products is enormous. Only a single case of financially miss-selling a ZDS guarantee through only one of your partner agents can trigger an FCA investigation into all the companies that are listed in your registry of introducers. This is particularly dangerous for agents since there is a fine line between ‘introducing’ and ‘advising’ on financial products and the strict rules around the financial promotion of such products (e.g. taking a commission). Which measures and controls do you have in place to mitigate such a potentially devastating scenario for your partners?
Looking forward to your responses.
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…do rent insurers accept this? It is usually a condition of rent guarantee insurance that the tenant have paid at least 1 month’s rent by way of deposit. Technically, with this, they wouldn’t have.
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Tell you what Zero Deposit and Flatfair are splashing the cash on these shameless paid PR pieces… 3 in 3 days! Give it a rest!
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26% increase of tenants you wouldn’t want? Does this not prove that the private sector wouldn’t normally have to be bothered with these tenants ….. we are not a charity! The deposit always had the effect of telling those tenants who can’t raise a poultry sum to stay away. (a) if they can’t raise a deposit is high risk they can not afford to keep up rent repayments and should not be in the private sector (b) a financial forfeiture over the head of any wayward misbehaving tenant is eroded … increased risk to landlord.
These schemes are offering what? Looks good on paper but there is more small print and questions are being asked if this really is the way forward or just another way for someone to make money out of the system without actually helping. What it is without not doing is prevention, the duty of care an agent has towards the landlord. The strife for landlords and loss of business for agents from disgruntled landlords is being overlooked to have to claim on an insurance policy red tape. The private sector is constantly being used to provide “social housing” for tenants who cannot afford to rent, misbehave (no intention of changing their ways) and rejected by local authorities (often evicted) and industry reformed to accommodate (take over) by government.
Reform the laws making it a criminal offence for tenants who breach the terms of a tenancy agreement, just as they have done with landlords and agents!!!
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