Tenant Deposit Costs Decrease!
Wed 11 Dec 2019
Whilst deposits for house purchases are increasing, the amount of money that tenants are spending on their rental property deposits is decreasing. According to research from Hamilton Fraser’s deposit replacement scheme OME, this is first time that this has happened since 2018.
We first started seeing strides being made to reduce the amount of deposit a tenant was required to put down in 2018. So, what are the reasons that these deposit amounts have reduced?
Longer Renting Periods
People are now renting for a longer period of time that before 2015. A driving factor behind this is a shift in lifestyle choices with renting being seen as a more considered long-term option. Additionally, with house purchase deposits being higher, it is taking people longer to save up for them, which in turn increases the length of time someone may choose to rent. What’s certain is that for both of these reasons, the number of deposits being taken is therefore reduced.
Legislation Changes
Recent changes in property rental legislation reduced the number of weeks rent that a letting agent or landlord can charge. This relates to both a holding, as well as a tenancy deposit. If you’re not familiar with the deposit legislation changes, check out our summary information blog here.
Zero Deposits
In a bid to help tenants move into rental properties without having to find large deposits, new insurance schemes have been set up which effectively remove this initial cost. Zero deposit schemes benefit landlords because they Speeds up rental process, help to avoid void periods, attracts a wider audience of prospective tenants and reduces costs.