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TODAY'S OTHER NEWS

Another product offering an alternative to deposits hits the market

The rapid growth in alternative non-deposit schemes for letting agents, landlords and tenants has hit the market.

This one, from Blinc UK, claims to offer generous commissions for agents.

Blinc’s Deposit Replacement Scheme involves tenants buying a six, eight or 12 week online product. 

The firm says the standard six week DRS will cost the equivalent of one week’s rent, including VAT; the only requirement of this scheme is that the tenant has passed referencing checks, which can be through any approved source. 

Commissions are payable to agents for every tenancy taken with the scheme.

The firm says that based on the average rental in the UK, tenants will be seeing upfront cost savings of approximately £1,100 on their initial move - much more in London. 

The company claims systems of this kind will allow greater churn as tenants can move more freely between properties as the set-up costs will be lower than now. 

“We are very excited about our new product launch as it is not often you can create a service that benefits every party involved” says Daniel Leeson, director at Blinc UK. 

“We had predicted a very quick uptake on the new scheme, but even we have been surprised with the level of excitement in the market around the DRS and, if things continue as they have started, we could be looking at a whole new way of renting across the board” he adds.

In recent months there has been a spate on alternative non-deposit systems promoted by companies. 

  • icon

    I cannot see how this will work in principle with bad tenants or those who get into financial difficulty during the term. But then that won't be the Agents or Landlords worry from what I am reading so all good?!

  • Kristjan Byfield

    The key issue to successful uptake is ensuring Tenants fully understand how these products work- whilst there is a saving of initial outlay, for good tenants costs will typically increase as they are paying for a product that they wont be refunded. For those with damages, they also need to fully understand that the product they pay for doesn't contribute to these charges later so these do not work (at least for the tenants) in the same way as a traditional insurance product- the cover is provided to the landlord whilst being funded by the tenant. The mis-understanding of this arrangement by tenants could cause an uproar once these products reach 'end of tenancy' stage.

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