One million landlords set to use tenant deposit alternatives

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One million landlords set to use tenant deposit alternatives

More than one million landlords could end up using deposit alternatives if government plans to scrap insured tenancy deposit schemes go ahead, research reveals.

Zero Deposit found 9% would move directly to a deposit alternative, which it calculates could represent about 266,736 landlords.

A further 26% said their decision would depend on what the tenant preferred, potentially bringing another 755,751 landlords into the market for an alternative.

And two-thirds (64%) would opt for a traditional custodial tenancy deposit scheme.

Landlords weigh deposit options

The firm’s chief executive, Sam Reynolds, said: “These findings show landlords are approaching any potential changes to tenancy deposit legislation pragmatically.

“While many will naturally move to custodial schemes, there is also clear evidence that a significant proportion are open to alternative solutions, particularly where they offer greater flexibility for tenants.”

He added: “What’s becoming increasingly clear is that landlords aren’t looking for a single replacement for insured tenancy deposits.

“They’re looking for a broader toolkit of trusted solutions that help them manage risk, navigate regulatory change and meet the needs of an increasingly diverse tenant market.”

Damage protection tops priorities

The survey of 800 private landlords found that protection against property damage was the most important consideration for 25% of those questioned.

Faster dispute resolution was chosen by 17%, while 16% pointed to regulatory certainty.

Lower costs and reduced administration each ranked 15%, with tenant affordability at 9% and cashflow at 3%.

More than half of landlords (58%) said they would like the flexibility to give tenants more than one deposit option if insured schemes were abolished.

The remaining 42% would prefer to offer a single option.

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