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Online agency boss backs insurance-based alternatives to deposits

Online lettings agency Upad says landlords are concerned that insurance-based alternatives to traditional deposit schemes may not cover them for repairs when a tenant moves out.

In addition, some tenants felt that despite sometimes having to borrow money to pay their deposit, at least in the majority of cases they would get their deposit back, whereas paying for the replacement insurance would see them making payments they would never get returned.

In a survey of landlords and tenants conducted this month, Upad says some 57 per cent of landlords claimed they had never had a tenant struggle to raise a deposit, and only 35 per cent felt finding tenants would be easier if they offered an insurance-based scheme as an alternative to requesting a deposit.


Just 14 per cent of landlords thought an insurance deposit scheme was clearly a better idea than taking a deposit - amongst tenants, 37 per cent felt they would definitely rather pay the monthly insurance than a deposit.

However, despite the lukewarm reception for the insurance-based schemes, Upad’s founder is a big enthusiast.

“These schemes are a great idea. Immediately, tenants will be free of the struggle of having to raise a deposit for a new rental before they have got their existing deposit back, and those who are unable to raise a deposit at all, or have no means of borrowing the money, could find themselves able to rent a far wider range of properties than they previously could” says Upad founder and CEO James Davis.

“I am definitely in favour of such schemes and hope in the coming months a greater proportion of landlords will also take this point of view.”

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    Insurance is about two things, collecting premiums and avoiding paying out. Tenants will just walk away leaving the landlord or their agent to pick up the pieces and therefore it is the Landlords who will lose out as it will be them who end up paying the premiums (read tenant fee ban), paying to recover the property at the end of a tenancy and then fighting to get a payout from the policy.


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