I was talking to a mortgage advisor friend online yesterday abs she said that some agents have done away with deposits and use insurance instead. She wasn’t sure of the details but said that tenants pay one week worth of rent at the start of the tenancy. They do not get it back and every year they have to pay £42 (she thinks) and at the end of the tenancy if anything is wrong with the property the company can pay out up to 6 weeks worth of rent. Does any one know anything about this? Is it something that Open Rent offers?
Hi Caroline, OpenRent doesn’t offer any product like this. These products are generally called deposit replacement products.
Many agents are pushing them because they are a way for agents to continue to charge tenants fees after the Tenant Fees Act banned most fees last year.
These products offer bad value for tenants, because compared to a normal cash deposit, they are guaranteed to lose more money due to having to pay annual fees.
Here’s something I wrote on the subject last year.
Thanks Sam, that is really helpful.