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Ditch deposits - 43% of tenants want a no-deposit alternative

A new study shows that 43 per cent of tenants want the system of private rental deposits to be dropped and replaced with insurance-based alternatives. 

The study comes from the Centre for Policy Studies, a think tank, which claims the average renter loses over £300 per tenancy due to lost interest and inflation because of what it calls “forced participation” in deposit protection schemes.

“Forcing tenants to pay large up-front deposits mean many people struggle to move between properties. They also lose out on accruing interest on their money which instead is retained by their landlord or letting agency, and often face a real struggle to receive their money back” says the CPS. 


Instead the think tank calls on the government to adopt insurance-based alternatives “which could easily be developed within the existing insurance market, would enable renters to retain more of their own money when moving into a property, enjoy the interest accruing during their tenancy, and avoid borrowing from friends, family, or pay-day lenders to gather enough funds for a deposit.”

CPS report author Professor Brian Sturgess says: "Currently many people are simply unable to enter the rental market due to the need for a large upfront deposit to be provided before they move in. The proposals in this report offer a solution to the inherent unfairness of renters losing out on the interest they would have accrued on such a deposit, and often having to struggle to get their money back”.

Similar support for alternatives to deposits have been advocated by consumer organisation Which?

The CPS report has been backed by Ajay Jagota from the #ditchthedeposit campaign, who is also head of zero deposit rent firm Dlighted.

Jagota says the introduction of deposit free renting would allow the £4.2 billion of renters money currently held in deposits to be released into the economy or utilised in Help to Buy ISAs.

“The message to landlord and lettings agents couldn’t be clearer. Your customers want deposit free renting. It’s clear that the tide has irreversibly turning against old-fashioned deposits which cost renters a fortune and cost landlords and letting agents tenants without actually protecting them against anything” he says.

“In the case of Dlighted deposit free renting means deposit free renting. With Dlighted renters pay nothing as our low cost insurance policies are purchased by landlords or letting agents because deposit free renting makes is so much faster, easier and cheaper to find and keep good tenants.”

On the subject of regulation for such schemes, Jagota adds: “We are calling for all Deposit replacement operators to be directly authorised by the Financial Services Authority, not as introducers or intermediaries (as many currently are), so collectively as providers, we can be subject to much more meaningful and rigorous regulation than others in the private rented sector"

Poll: Will deposits still exist in a decade's time?


  • Angus Shield

    I think it is down to the Landlord to specify if they wish their potential tenant to take a stake in their obligatory responsibility for their tenancy. If the applicant requests a deposit free tenancy, then this is their choice though on this occasion it would not meet the landlord’s expectation as a stakeholder in their tenancy.
    I often overhear conversations (train, pub, etc), how insurance companies pay for holiday 'illness', 'lost items', 'floods in homes' etc; it’s all too easy to pay a small amount and the mechanism then pays out a large amount. I am not suggesting any participant would set out to abuse the scheme but is there the potential?
    I am not an objector to deposit-free tenancies, though I do offer a concern to what 'investment' the tenant then has in the process of care and responsibility - look at how Council Bonds are abused and when the occupants vacate they expect the bond/stakeholder to make amends.
    To myself, and my staff, we have disused this and believe ultimately, it’s the property owners’ decision and their risk of long voids. We could run both styles side-by-side with our client’s instructions.
    Lastly "They also lose out on accruing interest on their money" - please advise where that interest is attainable....


    Excellent post! Thank you and amen.

  • James B

    Of course tenants will vote no deposit! I would. Maybe attach a survey of how many landlord want no deposit replaced by complex time consuming insurance products no doubt littered with ‘get outs’. Nothing other than an advertising post

  • icon

    Just hired a motorhome at the value of one third of a first time buyers house and paid for damage waiver. Still had to pay a deposit of £750

    No deposit renting! Really!!

  • S l
    • S l
    • 18 September 2018 09:25 AM

    this is only to abuse the system pretending to be the tenant victim. The law and no deposit ruling will only increase the ever increasing tenant who ran off without paying rent and causing huge damages to properties of good landlords. With no deposit comes no responsibilities and nightmare tenants who are on the increasing year after year. you do not find good tenant unless you got a leverage of deposit which they would want back. The law is increasingly causing anti capitalism and increasing debts which again whose fault the country is going down with huge debts. They keep making policies to clamp down on honest hardworking landlord who most of the time are not making much money and helping more tenants to go on renting rather than buying because they can get away with not paying rent and not paying for damages caused by them because the law lets them be irresponsible. How much more can the country survive with these authorities making bad policies to bring the economy down and nobody wants to be responsible and nobody wants to work hard because its not worth it.

  • James Robinson

    Tinker, tinker, tinker! When will politicians just leave our industry alone for five bloody minutes.

  • icon

    We offer nil deposits for some of our properties nut the tenants opt for the full deposit instead, we thought this may help more people.

    S l
    • S l
    • 18 September 2018 11:22 AM

    hi evelyn, please explain whats the difference if nil deposit. do you charge higher rent? what about non rental payment and damages? thanks

  • jeremy clarke

    What a load of b*****t! Try asking 100 landlords the same question I guarantee you would not get the same answer.
    Faced with the option of anything for free people will jump at the chance, look at how many students got excited when corbet promised them free everything at the last General Election!

    How much is this chap Jagota paying for his editorials that appear in LAT about once every 10 days?
    I and many others have businesses that we would like to promote this frequently, please explain how we go about getting free advertising

  • S l
    • S l
    • 18 September 2018 11:32 AM

    shame corbet did not offer free education. we need more brains and less freebies and less whinging of poor old tenants when they do not pay rent and caused huge damages

  • Kristjan Byfield

    £300 in lost interest and inflation- can someone please tell me which bank they got these interest earnings from because with the average deposit being around £1200 that's 25% so I will be moving all my money there. A survey like this is pointless unless it verifies that those involved fully understand how the scheme works- or structures questions in a way that makes it impossible not to understand.

  • Paul Singleton

    In a survey conducted by me today 100% of landlords asked said they would much rather have a mortgage that costs them nothing per month and that if the property needs repairs that they would like their lenders to pay for the repairs.
    The rubbish that is getting peddled nowadays is nothing short of madness. Fact.


    Just cheered my day up....100% true

  • Lenny White

    That's amazingly LOW!! Only 43% want no deposit??!!!


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