Tenant group slams ‘wild west’ of deposit replacement schemes

Deposit replacement schemes have been labelled as a “wild west” by campaign group Generation Rent.

Speaking yesterday on Radio 4’s You and Yours programme, Hannah Slater, policy and public affairs manager for Generation Rent, expressed concerns about the emergence of deposit alternatives.

She said: “Deposit-free schemes are a real wild west with a lack of regulatory oversight and information on costs and ability.

“There is a real spectrum of products. They are really cashflow solutions for tenants that reduce upfront costs but you can still end up paying in the long run so it doesn’t help with affordability.”

In contrast, Slater argued, tenants at least have a chance of getting a traditional deposit back – rather than paying a lower, but non-refundable fee for a deposit replacement product.

She added: “There is obviously a place in the market but it is important that deposit protection schemes are improved so they can compete with these ultimately poorer value alternatives.”

Slater was speaking during a segment on the rise of deposit scheme alternatives that also featured flatfair, described by Slater as “on the better end” of the market.

You and Yours presenter Melanie Abbott asked flatfair co-founder Franz Doerr about its regulatory status.

Doerr said he would support more regulation but added that while his firm was not regulated, it is part of the Financial Conduct Authority’s innovation hub where it can get first-hand advice from the City regulator.

He said: “Regulations need time to catch up. At the moment tenants have to trust landlords and agents that they have done their due diligence.

“We think there should be regulations introduced through the Housing Act such as ensuring a scheme uses independent mediation and is insured.”

Doerr was also challenged on what would happen if flatfair collapsed and responded that there was insurance that would mean no tenant or landlord would lose money.


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  1. Oliver Wharmby

    These schemes are going to fuel more PI claims when they go wrong.

  2. jeremy1960

    Generation rent – “nasty landlords and agents are forcing tenants to pay too much deposit!”

    Gov – “thank you generation rent, we have listened to you and ignored the industry,  we have decided tenants will not have to pay such deposits! ”

    Generation rent – “but tenants will now be paying more in insurance /warranties than they were paying in deposits, it’s not fair !”

    Industry “we told you so!”

    Gov – “yes but our next plan is free unicorns!”

    Generation rent – “oh goody gum drops!”

    Industry -“it won’t work, unicorns cannot be free!”

    Gov – “who are you? What do you know?” “We know best, anyone want the housing minister’s job, we’ve promoted him to chief unicorn minister? ‘

    1. Mothers Ruin

      Love this! Please can I tweet your reply to Generation Rent. Pretty please


  3. JWVW

    We seems to forget that “Cash is King”.

  4. ChumpExecutive

    This is the next mis-selling scandal. Even Hannah Slater from Generation Rent herself misunderstands the schemes as she thinks tenants may or may not pay “in the long run”. In the long run Hannah (and the average PRS tenancy now last 4 years), the tenant will have paid a week’s rent as a policy premium and be liable in full for all dilapidations and rent arrears, or, if they are really unlucky, will have paid £20 extra on top of the rent every month for 48 months (£960) and still be fully liable. These pay-as-you-go schemes are a disgrace to our industry.

  5. AgencyInsider

    The only circumstance in which Generation Rent will cease their persistent irritating ‘me, me, me, it’s all unfair’,  whine is when every one of them is given a rent free property with zero obligations and absolutely no financial outlay.

    1. Robert May

      Generation Rent represent only a small proportion of their generation and are fairly much confined to one geographical location.

      There are  millennials who are doing what a lot of my generation did, rolling their sleeves up working hard, going without and saving. Buying and renting as their mood and means allows them.

      There are a lot of malennials who are doing what a lot of my generation did, bemoaning their lot.



  6. Nick Salmon, M.D. Property Industry Eye

    We have removed a comment from this story that was made by a User passing itself off as a company with which it has no connection.

    This is not only a breach of our terms & conditions, it is a particularly stupid thing to do because it will always be discovered and we will deal with it appropriately.

  7. Mark Walker 2

    It seems that nothing is satisfactory for them.

    “What do you actually want?”

    “A complete redistribution of wealth throughout society!”

    “And how do you plan on achieving that.”

    “Well we’re going to keep lobbying the government.”


    “Be the change you want to see”

    “You pay your CEO a six figure sum.”


  8. Lil Bandit

    There were good guys in the wild west, just stick to straight shootin’ FCA regulated firms and you are sitting pretty.

  9. watchdog13

    The schemes that are

    1) FCA regulated.

    2) work with an independent dispute arbitration sevice

    3) are insurance backed

    are the very least an agent should be looking at.


    deposit replacement schemes are particularly attractive for tenants who stay in a property for several years as they only pay once.

    Also, these products should not be offered as an option alongside traditional deposit schemes.



    1. Mark Walker 2

      We utilise the traditional deposit scheme and our tenants who stay in a property for years only pay once.

      But really they don’t pay at all if they don’t trash the place.

    2. drasperger

      why not offered alongside a deposit…?surely any fee demanded of an applicant as a condition of securing a tenancy would be illeagle after (June) I thought choice would be mandatory?

  10. Andy Halstead

    Groups like Generation Rent really do make you wonder………. Our industry innovates and develops products and services to help tenants. No matter what we do we attract criticism, do they have any grasp on reality?
    Tenants are adults, capable of making decisions, they have choice and the ability to decide what is best for their circumstances.
    The private rental market place is not social housing. It is a commercial market, tenants need a good deal, so do agents and their landlord customers. The most vulnerable people in our society should be cared for by the government and social services, not an industry that obviously requires profits to be made.
    Letting Agents do a fantastic job, work long hours and rarely get recognised for the good that they do.  There are far more scoundrel tenants than agents.

  11. BillyTheFish

    Is this a really lame advert for Flatfair or have GenRent & Y&Y just been duped into providing a free ad?


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