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Deposit-free private renting 'may tempt tenants from social housing'

A survey suggests that the advent of deposit-free renting in parts of the private rental sector may tempt tenants away from social housing.

The survey, conducted for MovingSoon, involved prospective tenants giving their views on deposit-free renting - now possible thanks to a large number of new insurance-based alternatives coming to the market. 

More then seven in 10 tenants backed the deposit-free princple.

“Many home seekers remain frozen out of private renting due to large deposits. Prospective tenants registered with our site strongly like the concept of an insurance scheme” explains Paul Malone, who runs MovingSoon.

He says that during 2017 the average deposit for a rental property was £967, and that not having such a substantial upfront payment in future might tempt social housing tenants who - until now - have been put off private renting because of this cost. 

“Meeting the cost of the policy makes financial sense if the landlord can get a tenant quicker. Every week a property stands empty costs an owner money. For the tenant, some schemes track rent payments and that can boost their credit score. This is a massive bonus for young people eyeing the property ladder and might be the deciding factor in choosing to go with a private landlord” adds Malone.

But his site’s survey also reveals that only a third of prospective tenants trust private landlords, while the figure rises to seven in 10 expressing more confidence in housing associations.  

The biggest fear for tenants is being evicted, with 41 per cent saying it was their top worry.

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    In principle the schemes appear a good idea - in practice I wait to see the outcome and how this will work well for all concerned.

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