The average cash deposit of five weeks rent rose by four per cent over the last quarter from £1,217 at the start of July to £1,321 at the end of September, research has revealed.  

Compiled by deposit alternative supplier Reposit, the data also shows the average cash deposit has increased by 13 per cent since the beginning of the year when it stood at £1,168. 

The firm says the figures demonstrate the difficulties facing tenants considering they often have to raise the funds for a second deposit when moving properties while waiting for their first to be returned after being tied-up in a cash deposit scheme. 

Based on Reposit’s figures, this means tenants are having to raise a second lump sum of £1,321. Combined with their average deposit from 12 months ago of £1,287, that’s £2,608 that a tenant has tied up in cash deposits. 

Reposit is launching a rental index based on its internal data and chief executive Ben Grech says: “Our figures are a stark reminder of the rising costs facing tenants and the eye-watering sums now needed to fund two separate cash deposits. 

“Deposit alternative products, which are FCA-regulated, can facilitate a better solution for tenants, who pay one week’s rent as a non-refundable fee instead of 5 weeks’ rent at the start of their tenancy and also offer landlords eight weeks of protection.

“Taking our latest figures as an example, instead of having to raise a total of £1,321 for a five week cash deposit, a tenant pays £246 instead. This means the tenant can keep hold of £1,075 and use it however they see fit – maybe to buy new furniture or to invest in a high-interest savings account.”