Rental management agents are reporting not just an upsurge in the numbers responding to advertisements for zero deposit properties, but that prospective tenants are increasingly making direct enquiries about their options to secure a zero deposit lease.
With some agents reporting receiving at least 50 percent more respondents for zero deposit leases versus traditional leases, it stands to reason that agents and landlords have an ever-expanding potential to secure the top tenants this way.
This is according to Martin Goodman, Director of Rentshield, who says they are moving into more innovative times in the residential letting space. Agents are increasingly seeing that the perception that a tenant with a zero deposit lease is more likely to default, is nothing but a myth.
He says Rentshield has shaped its suite of services around a unique zero deposit offering that, in fact, amplifies the agent’s and landlord’s protection and control. “Rentshield clearly demonstrates that zero deposit tenants pay better. Only 2.5 percent of our zero deposit tenants currently default, and that’s way below the average for traditional leases, which is 15 percent according to the latest TPN residential rental monitor.” The rising cost of living is not good for tenants, or for landlords. Zero deposit renting is a new way for prospective tenants to rent smarter, to free up their money and better control their financial security. It’s a solution on the other side of the spectrum where landlords aim to protect themselves from defaults or damage by charging up to two or three months' rental as a deposit.
This practice may well be too prohibitive at the time for potential tenants. Furthermore, Goodman says there is no evidence that tenants who outlay that kind of deposit don’t default; nor is it any actual indication that they are more likely to look after their rented home well. Rentshield’s zero deposit service offering delivers benefits to landlords and agents including proper qualifying credit and character checks, procedural property inspections and a unique slow payment service. Rentshield will pay the rent on behalf of the slow-paying tenant as soon as the landlord submits a claim to Rentshield, which is easily done through the Rentshield online portal.
Claims can be made within 30 days of the tenant not paying rent, and are paid out to the respective landlord within 48 hours of lodging the claim. This also supports a usually great tenant by giving them a much-needed opportunity to steady their finances and avoid the proverbial downward spiral into default, says Goodman. For agents, Rentshield helps to protect their customer service standards as landlords will often put pressure on agents to secure rentals on time, causing significant stresses in these all-important relationships. Rentshield’s management of slow payments is at no extra cost to the agent or landlord as all costs involved are included in the tenant’s monthly rental at a fixed cost. Goodman says there’s no doubt that a zero deposit lease is an appealing option for the prospective tenant, no matter what their income level. As this kind of innovation takes mainstream hold, it is going to be impossible for agents and landlords to compete for the cream of the tenant crop while offering traditional leases that are heavily laden with costly deposits.
There is also no need, as the security offered by a traditional deposit is truly limited and one-dimensional. Tenants are already turning their attention to zero deposit leases, it’s now up to agents and landlords to explore more innovative, multi-dimensional letting solutions that offer them enhanced security while keeping the rental option affordable and attractive for their tenants.