You are here: Home - News -

Calls to scrap deposits for renters

by:
  • 06/08/2018
  • 0
Calls to scrap deposits for renters
Large, up-front deposits paid by renters should be scrapped, a leading think tank has said.

 

A report for the right-wing Centre for Policy Studies said forcing tenants to come up with enough cash for deposits – which average around £1,041 – meant many people struggled to move between properties.

It also found the average renter lost more than £300 per tenancy due to missed interest and inflation.

The report suggests introducing a new deposit replacement insurance system, which would allow renters to insure against potential damage or missed rent payments without having to find up-front deposits.

Under such a scheme, renters would retain more of their own money when moving into a property, earn interest accrued during the tenancy, and avoid borrowing from friends, family, or payday lenders.

 

Landlord protection

They could also build up a reputation as a good tenant through a ratings system similar to no-claims bonuses for motor insurance, while landlords would still receive protection against property damage and missed rental payments.

A YouGov poll carried out on behalf of the think tank found 43% of renters would support the introduction of an insurance system.

Robert Colvile, director of the Centre for Policy Studies, said: “This government has a real opportunity to rectify the damage done by Labour to the rental market.

“By endorsing an insurance-based model as an alternative to a rental deposit, the government would rectify an unfair system which polling shows is unpopular with hard-pressed tenants.”

There are 13 Comment(s)

You may also be interested in

Read previous post:
banned rubber stamp
Buy-to-let landlords may face stamp duty rate hike in the coming Budget

The government is planning more stamp duty on homes purchased for rent in order to ease the housing crisis.

Close