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Tenant perspective: Zero deposits

Posted 13/02/2019 by Reeds Rains
Categories: Landlords
Property

The Zero Deposit Guarantee (ZDG) is a guarantee for landlords, taken out by tenants, that means they don’t have to find four to six weeks’ rent on top of their first month’s payment before they move in. 

Tenants pay the equivalent of one week’s rent to Zero Deposits, which gives the landlord the same protection as a six-week security deposit. There is a further £26 administration fee that the tenant pays annually. At the end of the tenancy, any disputes are adjudicated via The Dispute Service (TDS), Zero Deposits pays the landlord any monies due and then recovers their costs from the tenant directly.

While tenants benefit from a significant reduction in their up-front costs and don’t have to wait for a deposit to be returned at the end of the tenancy, the scheme is also good for landlords:

  • A property may let more quickly, as you don’t have to wait for tenants who are able to get together such a big initial lump sum
  • You save time and money by not having to register with a deposit protection scheme
  • Zero Deposits pays you for any deductions within two days – more quickly than any other deposit scheme provider
  • You may be better protected if any loss or damage by the tenant totals more than the amount of any security deposit you might have taken – especially given that the government is considering reducing the deposit cap from six weeks’ rent to five.

You also have assurance that the Zero Deposit Guarantee product is robust, as it is covered by Munich Re, one of the world’s largest re-insurance companies, and the company is regulated by the Financial Conduct Authority.

If you’d like to find out more about accepting this scheme on behalf of your tenants, do get in touch.

Sources:

https://www.zerodeposit.com/

https://www.theguardian.com/money/2017/jun/10/deposit-free-renting-will-tenants-lose-out

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