Dispute rate looks similar to traditional schemes, says tenancy deposit replacement firm

A fifth of check-outs by one of the deposit replacement schemes, Reposit, have ended in some form of charge being submitted to the tenant.

The scheme – launched in 2015 – says its end of tenancy data is slightly less than the experience of mainstream deposit protection providers.

Around 30% of traditional deposits have some sort of deduction.

Reposit has given EYE exclusive data on its tenancy checkouts since launch in 2015, which show that 2.9% of tenants who have been charged by their landlord have raised a dispute, which is close to the 2-3% dispute rate of the traditional providers.

It said just 5% of charges owed have ended up with a tenant defaulting, which is covered by the insurance behind its product.

The main reasons for charges were cleaning (40%), damage (30%) and rent arrears (20%), with the average value of a dispute at £546.

Jude Greer, co-founder of Reposit, told EYE: “We have always seen the claims and checkout aspect of our business as the single most important thing to get right.

“The market has understandably had initial concerns that not taking a cash deposit would negatively impact tenant behaviour due to a perceived lack of ‘skin in the game’ and that it was only a product that would appeal to the very young.

“As we are approaching the 1,000th tenant to have checked out under our system, we felt it important to share the data, so the market can see that it is extremely similar to that of the traditional deposit schemes.

“Not only that, but a significant percentage of our tenants are over the age of 40, proving this isn’t just a product for students and tenants in their early 20s. It is still early days, but it is looking very positive.”

x

Email the story to a friend

Thank you for signing up to our newsletter, we have sent you an email asking you to confirm your subscription. Additionally if you would like to create a free EYE account which allows you to comment on news stories and manage your email subscriptions please enter a password below.