The government recently announced that deposits would be capped at 5 weeks’ rent – down from a previous promise that this would be six weeks. The news has not been well received across the industry with some headlines claiming politicians are “again hurting our industry”.
The Residential Landlords Association has called the decision an “about turn” which will mean that “vulnerable and elderly tenants will suffer”. This is because the RLA felt that six weeks’ rent provided a fair balance between affordability and financial risk, but that a reduction to five weeks’ rent could mean landlords will have little confidence offering tenancies to higher risk tenants.
It’s an interesting theory, some of which could prove to be true. However, at Darlows we have long been aware that the upfront costs of renting a home can be too much for some tenants – but that landlords need to be confident they have adequate protection.
That’s why earlier this year we teamed up with flatfair and launched an alternative to taking a deposit from a tenant. This innovative service means that the tenant simply pays a one-off membership fee equal to just one week’s rent. Alongside this, the tenant makes a commitment to pay any lawful claims at the end of the tenancy.
Tenants will still have the same protection as now, as the scheme mirrors the government’s deposit protection scheme, whilst at the same time improving the way the payments and protections work. We believe the scheme is even more advantageous than the current scheme for landlords, because the flatfair solution provides protection equal to 12 weeks’ rent, rather than five.
Also, the scheme reduces void periods as any claims at the end of the tenancy are resolved swiftly. flatfair provides the
funds to make any necessary repairs or replacements, so the property can be re-let in a timely manner. The flatfair service ensures a win-win for everyone. Tenants will benefit because they don’t have to tie up money in deposits which could help them move more quickly.
Meanwhile, for landlords they will see fewer void periods and are likely to experience less tenancy disputes. Whilst the rest of the industry worries that vulnerable tenants could be denied access to the Private Rented Sector, and that landlords could be out of pocket, haart has an alternative that helps everyone.