Rent Arrears Or Damage Deposits

Deposits Don’t Cover Rent Arrears Or Damage

Cash deposits increasingly don’t cover landlords’ claims for rent arrears or damage, according to a new study.

Deposit alternative product Reposit examined data from UK tenancy agreements that ended this year and found that landlords needed to reclaim more than five weeks’ of rent to cover costs in 17% of tenancies – up from 13% in 2023. Meanwhile, 49% of agreements ended without any costs incurred by the tenant.

CEO Ben Grech says this illustrates how cash deposit schemes don’t cover rent arrears or damage and don’t always provide landlords with the right level of protection because they are capped at five weeks’ worth of rent.

“Our figures show cash deposits are now inadequate across a significant portion of the market and one which is growing, most likely caused by the cost-of-living crisis,” explains Grech.

“Landlords hit by rate rises and growing costs find its eight weeks of cover reassuring, he adds. “Equally, tenants have faced affordability challenges, struggling to find the up-front cash for a deposit which is often unnecessary when 49% of agreements end without any costs incurred by the tenant, and there are alternative products available.

“We believe our product offers a solution that works more efficiently and fairly for each stakeholder in the rental process – landlords, agents and tenants alike – which is helpful in this tumultuous economic climate.”

With Reposit, landlords are guaranteed payment if tenants owe any charges normally covered by a cash deposit while the tenant remains liable for any damage at the end of the tenancy, with any disputes resolved through an independent resolution service within 14 days.

Blog Post from Landlord Zone

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