Deposit alternative service Zero Deposit is launching a new option which it says gives tenants more flexibility to split the guarantee cost on a monthly basis.
The service suggests that this option - called Flex - addresses the long-awaited lifetime deposit issue expected to feature in government reforms of the private rental sector.
Lifetime deposits will be transferable from one rental property to another, meaning tenants do not have to stump up a new deposit while waiting for the return of a previous one.
Zero Deposit says Flex removes the burden of double deposits for tenants while handing landlords enhanced protection versus a cash deposit.
Proptech company Canopy recently announced that it was partnering with deposit funding operator Fronted to launch the concept of a lifetime deposit.
However, Zero Deposit says its option varies from rivals in that it gives tenants what it calls “full flexibility to keep their cash deposit, and break the deposit loop, rather than it being locked up for the duration of the tenancy.”
It adds that a monthly premium starting at £3.75 per tenant will radically reduce the cost of moving.
Zero Deposit will launch the product through some agents next month before a wider roll out later this year.
This alternative will be offered alongside the current option where tenants purchase the guarantee upfront.
Sam Reynolds, Zero Deposit chief executive, says: “This is a progressive improvement to the way people rent and directly addresses the Lifetime Deposit challenge; radically reducing the cost to move for tenants and for the first time, handing them flexibility and control over their deposit choices through the tenancy. No fixed period and importantly, tenants are able to choose how to invest their 5 weeks cash, rather than entering the deposit loop.
“We remain focussed on our partners, landlords and tenants with clear benefits for all parties. Importantly, the landlord remains protected with Flex in every scenario and gains from the security and safeguards of a fully regulated product. Our fixed price or flexible option helps our partners access the best available tenants in the market, particularly useful on multi-agency listings, and deliver a great outcome for their landlords.”
Zero Deposit current agency customers include Connells Group, LSL and Foxtons.