A large landlord which decided to scrap deposits a year ago says the move has saved its tenants close to £3m.
Get Living, a pioneer of build-to-rent homes, announced last May that it was getting rid of deposit requirements for new tenants, and would be returning deposits to tenants already in situ.
Get Living has 3,000 renters in two locations in London – East Village, which was the former Olympic Athletes Village, and in Elephant & Castle.
Until last year, it required tenants to pay deposits the equivalent of six weeks of rent.
It has never charged tenancy fees, and now only requires prospective tenants to pass referencing.
Get Living CEO Neil Young said: “A year on, we’re proud we took the leap and scrapped deposits.
“To some it was madness, but to us it seemed the natural next step after abolishing fees and introducing longer tenancies.
“We are always looking at ways we can build trust with our residents – and trusting our residents to look after their homes has been a great way of doing that.
“We had a great response from our existing residents.
“For most it had been money that was locked up and a cause of much frustration. Whether saved or spent, it’s great to know that £3m is back in our residents’ pockets.
“We hope our experience will inspire others to follow, and one day deposit-free renting will be the norm.”
So Get Living’s new system has been in place for around a year so there is unlikely to have been many changes in tenancy. With 3 year tenancies they offer they will not know the impact for a while yet. Come back in 5 years and let us know how much loss there has been with damages, unpaid rent etc. Most tenants get their deposits back as most tenants are responsible. With my small portfolio I took on 2 new tenants last year following thorough referencing. One turned out to be on drugs and failed to pay the rent after a couple of months and then disappeared resulting in about 4-6 months to get possession with a loss of several thousands of pounds (luckily insured) and the second is two months in arrears and may be face eviction if it gets any worse. I have to say neither have caused any malicious or major damage although minor damage and cleaning costs and general and energy costs wiped out a £1,000 deposit ( a loss I would have otherwise suffered). All I can say is “my experience will NOT inspire me to follow the Get Living business model”. I am sure both of my tenants would have loved to have spent their deposit money elsewhere! Why doesn’t Mr Young go the full distance if he trusts his tenants so much and take them on without referencing? a great way of building trust I am sure. I wish him good luck but I guess with 3000 properties they can play the numbers game and right off the losses.
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I don’t believe this guy, he’s a stooge for anti landlord rhetoric. What he’s not telling us is that he demands guarantors thereby negating the need for deposits. Any experienced landlord knows that a deposit is essential in most cases. Oh look at me I’m so clever and forward thinking erm no. You haven’t told the whole story fella.
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I quite like the idea of a no deposit model especially as I see on a weekly basis the carnage which is caused by the requirements of deposit compliance.
from the initial requirements of each of the deposit schemes, to the confusion of the scheme leaflets, to the 30 day “cliff edge” to the definition of new receipt of deposit monies, we only need another “Superstrike” court decision and everyone will be running for cover again. Deposit compliance is the first thing shelter or the CAB will be looking at when defending a possession claim.
It will certainly make you different in a crowded market place.
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Have you looked at the Leaders offering? Tenants pay 4.8% each month as “insurance ” so on an average 3 bed semi in this area at £1250 that equates to £60 a month, if that tenant remains 3 years they will have burned £2160 with nothing to come back, plus they have to pay a fee of £150 which is termed deposit dispute fee, returned at end of tenancy if no dispute! We would take £1750 deposit and 97% of our tenants got full deposit back last year.
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Their website is slick and attractive. It’s a very good offering to tenants on the face of it. However the ‘sample contract’ still has a large section on deposits.
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Check the internet – not everybody loves them as an off shore company!!!!
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