Tenancy deposit schemes in price-cutting skirmishes

The two insurance-backed tenancy deposit protection schemes have both cut prices for agents.

Mydeposits, the tenancy deposit protection provider spun off by the National Landlords Association, has thrown its weight behind the SAFEagent campaign by offering its registered agents heavily reduced fees.

Meanwhile, the Tenancy Deposit Scheme has also announced a cut in its fees, although it is not giving a special rate to SAFE agents.

The mydeposits initiative is part of a round of price cutting to attract more agents to the scheme. Although initially designed for landlords, it has won over an increasing number of agents, including the two biggest names in the industry – LSL and Countrywide.

Mydeposits is also upping the ante at a time when its competitor, the Residential Landlords Association, has teamed up with the TDS – originally an ARLA initiative for agents – to offer its landlord members deals which significantly undercut mydeposits.

From April 5, SAFEagent registered agents can protect tenancy deposits for just £10 (plus VAT) with mydeposits.

Letting agents accredited to bodies such as NALS, ARLA, NAEA and RICS will also benefit from a new lower protection fee of £12 (plus VAT) per deposit.

The one-off membership fee for these agents has also been slashed to just £50 (plus VAT).
 
Eddie Hooker, chief executive of mydeposits, said: “Whilst we are still open to all letting agents, we want to support those agents who are prepared to take that extra step and make a positive difference in the sector. As a leading provider of deposit protection for letting agents, it is only right that we reward agents with Client Money Protection with reduced fees.
 
“With our pay-as-you-go model, our agent members are only charged for the deposits they protect, rather than a rigid annual model. That has meant our pricing policy has remained stable for five years, allowing us to develop and invest in important areas of the business, particularly dispute resolution.
 
“Our online dispute service is unique to mydeposits and is part of the reason why formal disputes are resolved on average within just 15 days of receiving the dispute evidence from the parties.”
 
John Midgley, chair of the SAFEagent steering group, said: “We welcome this move by mydeposits in support of the SAFEagent campaign. It is an excellent example of industry co-operation which will amplify the message we want to deliver to consumers as well as rewarding those agents who have signed up to the SAFEagent mark.”

Meanwhile, the TDS has announced cuts of up to 26% in its base rate – the rate agents pay for registering each deposit before any discount.

The TDS says that coupled with discounts and members’ loyalty bonus, agents’ fees will be ‘substantially’ reduced.

Most members who have been with the TDS since last April will have base rates ranging from £9.75 for RICS, ARLA and NAEA members, and £12.75 for NALS and Law Society members, including the 50p loyalty bonus.
 
In addition, most members will also benefit from additional substantial discounts, with 45% entitled to both maximum discounts and the loyalty bonus in the coming year with rates down to £3.60 per tenancy.  

Chief executive Steve Harriott said: “As we are a not-for-profit scheme, we can repay our members with a combination of price reductions and improved services while still preserving our financial strength.
 
“We believe that our efforts will lead to many more agents and landlords choosing to use the Tenancy Deposit Scheme in future.”