The delayed Zero Deposit scheme is set for public launch shortly, eight months after the proposition was first unveiled.
The Zoopla-backed deposit replacement scheme, first revealed by EYE last May, was initially set for an autumn roll-out, which was later pushed to the end of 2017. It could now be set for release by the end of this month.
Jon Notley, the former commercial director for Zoopla, was unable to give a firm timetable, but told EYE they were taking their time to get the product right.
He said: “We have spent the past few months working closely with our partners to ensure that the Zero Deposit product is as attractive as possible for everyone involved in the rental transaction.
“With such a new product and with agents and landlords needing to be sure that deposit replacement does not disadvantage them in any way, we have understandably sought broad input from a number of agents and industry specialists. This has taken time, but it has been an incredibly valuable process.
“The result is a very strong proposition that we expect to launch shortly, with wide support from a number agents across the UK.”
The scheme will let tenants buy an insurance policy in lieu of a deposit costing the equivalent of one week’s rent, with landlords covered for six weeks’ worth.
At the end of a tenancy, if a landlord has a claim and this is accepted, then the tenant pays up.
If the tenant rejects it or disagrees with some of the claim, then both parties go to alternative dispute resolution (ADR), whose findings are binding.
If the ADR process rules that the landlord should be paid by the tenant, then the Zero Deposit Scheme will pay the sum to the landlord and then claim it from the tenant.
As well as Zoopla, Zero Deposit is working with insurer Munich RE and will use TDS for dispute resolution.
Comments (6)
Thanks Will and no offence taken, I appriciate your best wishes. I do agree, it is wise to place business with insurers who have a first class reputaion, I find personal recomendations to be a good gauge.
just dealing with Romain’s point, everything we do at Let Alliance is based on customer choice, tenants are not ‘required’ to buy an insurance policy, they have the choice to pay either 6 weeks rent as a deposit in the normal way or enter into a contract with us that costs 1 weeks rent. Early indications are that some 70% of tenants, if given the choice, elect for paying 1 weeks rent. At Let Alliance we do not deal with landlords, only professional Letting Agents. Dealing with Will’s point, it is inconceivable that we would attempt to avoid paying claims, if we did, we would have no customers to let down. With a track record of guaranteeing some £500,000,000.00 of annual rents, we have a solid reputation for paying claims and looking after our customers.
Happy New Year everyone; 2018 will be challenging, there will be winners and unfortunately losers. It’s a tough market with many bear traps ahead.
Andy, Your company may well be honorable but your industry often has a lesser reputation. My comments were not directed at your particular company and I apologise if that is how you have read my comments. Whenever I take out insurance I insist that certain firms of Loss Adjusters are precluded in the event of a claim and in particular the two that act for AVIVA given real life experience. The block of flats I refer to (in fact two blocks) are each on their 3rd or 4th time of repairs as insurers failed to do the works properly each time. This is not right and insurers must accept responsibility for the so called experts they employ. I accept there are some good insurers and some good & professional independent Loss Adjusters but experience dictates who I would personally chose to insure my portfolio with – it would not be AVIVA at any price, this is of course a personal opinion. Whilst I also appreciate your target market might be professional letting agents, those agents act for Landlords who need to be comfortable with your scheme. I do wish you every success with your scheme and hope it lives up to the standards you aim for.
What about the upcoming fees ban?
As the bill stands, requiring a prospective tenant to ‘buy an insurance policy’ will explicitly be banned.
Who trusts insurance companies? Why would a landlord give up their rights to take it to court if they were not happy with the ADR? Why would a tenant want to pay 1/6 of the deposit to then be liable for all costs if they cause damage and the ADR goes against them? Insurance companies are notorious for the so called loss adjusting skills – experts in not paying claims some even going close to claims avoidance. Why trust any of these people? I for one will not be accepting such schemes. Having had dealings with AVIVA where a property has had subsidence damage recur several times and they continue to do a “pollyfilla” job! an example of how Insurers and their Loss Adjusters behave.
Interesting!! Let Alliance Zero Deposit scheme was released months ago and working like a treat. The process is linked to our tenant references so no need for yet another ordering system/platform.