Almost six in 10 landlords would like to offer tenants a choice of deposit options if the Government goes ahead with proposals to abolish insured tenancy deposit schemes.
Research by Zero Deposit finds 58% of landlords would prefer the flexibility to offer more than one option, while 42% would stick to a single form of deposit protection.
The potential reforms could affect more than 2.1 million tenancy deposits currently held through insured schemes, according to figures cited from the Tenancy Deposit Scheme.
Zero Deposit’s survey of 800 UK private landlords finds 64% would move deposits into a traditional custodial scheme if insured schemes were withdrawn.
ALTERNATIVE DEPOSITS
A further 9% say they would move directly to a deposit alternative product, while 26% would base their decision on the preference of their tenant.
Zero Deposit calculates that the 9% figure would represent around 267,000 landlords when applied to the Government’s estimate of 2.86 million private landlords.
Including those who say they would be guided by tenant preference takes the potential market for alternative deposit products to more than one million landlords, although this assumes those landlords ultimately opt for an alternative rather than a traditional deposit.
Protection against property damage remains the biggest consideration for landlords when choosing how deposits should be managed, cited by 25%.
Faster dispute resolution follows at 17%, with regulatory certainty at 16%. Lower costs and reduced administration are each cited by 15%, while 9% identify tenant affordability as their main consideration.
‘GREATER FLEXIBILITY’
Sam Reynolds (main picture), Chief Executive Officer of Zero Deposit, says: “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.
“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.”
“We believe the direction of travel is towards greater flexibility.”
He adds: “Over recent years we’ve seen growing demand for products that remove barriers to renting while maintaining landlord protection.
“Deposit alternatives are one part of that, but we’re also seeing increasing interest in solutions such as Guarantor+, which can help landlords confidently let to tenants who may not meet traditional affordability criteria.
“Whatever the outcome of the government’s proposals, we believe the direction of travel is towards greater flexibility.
“Landlords and letting agents will increasingly want access to a range of trusted solutions that protect their investment, support good tenants and enable them to adapt as the private rented sector continues to evolve.”
