Countrywide’s Hamptons International is to work with a PropTech firm to try out a no-deposit lettings scheme in four of its offices.
Hamptons’ tenants in the trial areas will be able to move into properties without paying an initial security deposit, usually consisting of six weeks’ rent.
They can instead choose Canopy’s insurance product DepositFree which the firm says provides landlords and renters with the same protection as a traditional cash deposit; instead, this takes the form of a one-off policy premium paid by the tenant and covering the length of the rental contract.
Tenants will also have the option to pay rent through an app which, according to Canopy, will help improve their Experian credit score.
Jonathan Pitt, head of lettings at the agency, says the passport idea expedites the vetting and referencing process, meaning tenants will be able to move more easily.
“The rental deposit insurance gives our tenants choice and flexibility with what they pay at the start of a tenancy, as well as opportunities for landlords to have a competitive advantage in the market” he says.
Pitt adds that the passport system also acts as a record of trust and credibility where all applicants undergo rigorous screening that includes credit checks powered by Experian. The results appear in tenants’ accounts instantly, and they own their digital rental history and data, with the ability to choose with whom to share it with.
Canopy was set up in 2016 and its investors include Direct Line Group.
Tahir Farooqui, formerly an insurance consultant, launched Canopy after personal experience as a tenant in Australia, New Zealand and the UK, and regarding the referencing process as too expensive.
"You have to start from scratch each time you rent, having to prove who you are again and again" he says. Therefore he created Canopy to provide tenants with what he calls a “trust-based insurance rental passport”.