Arab Press

بالشعب و للشعب
Tuesday, Apr 28, 2026

'Deposit-free renting left me more than £500 out of pocket'

Concerns have been raised over "deposit-free" renting being mis-sold to tenants who do not understand the costs involved.

The option allows renters to pay a smaller, generally non-refundable fee in place of a traditional deposit.

Companies and letting agents offering it say it reduces upfront costs.

But campaign groups and the ombudsman have warned some are pushing deposit-free options without making it clear they could cost renters more over time.

A traditional deposit is typically up to five weeks' rent - but this is refunded at the end of the tenancy, minus any deductions for damage or unpaid rent.

With deposit-free options, renters pay less initially - usually a one-off payment equivalent to one week's rent or a monthly fee. But this is generally non-refundable and cannot be used to pay for damages.

When Simon first heard about the possibility of renting without paying a deposit he couldn't believe his luck.

The 23-year-old was keen to move out of his family home to live with his partner - but they didn't have enough for the deposit of more than £1,000 to rent in Sussex.

Eager to move quickly, the couple decided to rent through an agency which offered a deposit-free option.

It wasn't until they had already put money down and were going through the paperwork that they realised the monthly fee to rent without a deposit was money they would never get back.

'Down the drain'
Simon has been living there for more than a year - and has paid more than £500 in fees so far.

He feels the agency did not highlight the fee was non-refundable.

"I think for something like that all of this should be explained to you before they even let you go for it - you shouldn't need to hunt down the answers," he adds.

Simon says if the terms of the arrangement had been explained fully to him he would not have chosen to rent without a deposit and would have taken out a loan or carried on living with his family to save up to cover the upfront cost.

"Then at least we would get our deposit money back - rather than it going down the drain," he says.

In response, the agency said it was sorry Simon felt the terms of its deposit-free option were not explained clearly enough but insisted there was clear communication from branch staff by email and he had signed a document confirming he understood the terms.

It said the terms were "made clear at every stage of the rental process".

The property ombudsman, Katrine Sporle, whose office resolves disputes between consumers and property agents, says other renters have had similar experiences.

She says one tenant was forced to pay an administration fee to switch to a traditional deposit - even though they said they had not understood the terms of the deposit-free option.

Others were told they had to use a deposit-free scheme to rent with an agency.

Government guidance says a landlord or agent cannot insist a tenant uses an alternative to a traditional deposit, but it can be offered as an option.

Ms Sporle says deposit-free options are not necessarily a bad thing but agents should ensure tenants understand the terms.

David Cox, chief executive of ARLA Propertymark, which represents letting agents, says it welcomes anything which helps renters struggling to pay a new deposit before they get their previous one back.

However, he says, it is important tenants understand fees for deposit-free schemes are generally non-refundable.

Campaign group Generation Rent says some tenants feel under pressure to accept a deposit-free option in a competitive renting market.

Letting agents can earn commission from selling the products and schemes owned by agents themselves can also be lucrative.

The group's Georgie Laming says some agents see this as an income opportunity since the majority of letting fees were banned in June last year.

And there are now at least eight products on the market, with differing terms, which she says can prove confusing.

Some charge tenants as much as £100 to dispute a damage claim from their landlord - a fee which does not exist for traditional deposits, which are held in a government-backed scheme.

Ms Laming says she can understand why tenants might be tempted by deposit-free renting when the average up-front deposit in England and Wales is £1,108.

However, she recommends looking at other options - as some councils and employers may provide interest-free loans to cover deposits.

The government also plans to introduce a "lifetime deposit" to let renters transfer some of the deposit paid for a previous tenancy to the next.

This would make it easier for renters to move without having to pay a new deposit before they get their previous one back - although it would not help first-time renters.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
News Roundup
Strategic Saudi-Bahrain Causeway Closed Amid Security Concerns as Trump Deadline Approaches
Saudi Arabia Keeps Red Sea Oil Exports Flowing Despite Regional Tensions
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
Saudi Business Leader Abudawood Appointed Chairman of Merit Incentives Group
TotalEnergies Confirms Damage at Saudi Refinery Following Security Incident
Saudi Arabia Launches Early Construction Phase for King Salman Stadium Project
Saudi Shift Away from Longstanding Dollar Oil Framework Gains Attention Amid Iran Conflict
Türkiye and Saudi Arabia Resolve Long-Running Transit Visa Dispute
Saudi Oil Capacity and Pipeline Flows Reduced as Supply Risks Intensify
TotalEnergies Reports Damage to Saudi SATORP Refinery Following Security Incidents
Gulf States Assess Prospects of U.S.-Iran Truce as Regional Stability Efforts Intensify
South Korea Resumes Honey Exports to Saudi Arabia Following Sanitary Approval
Saudi Arabia Carries Out Sentences in Eastern Province Following Security Convictions
Saudi Sovereign Wealth Fund Backs King Street’s Regional Credit Strategy
Saudi Arabia Secures World Cup Return as Egypt Celebrates Landmark Qualification
Iran and Saudi Arabia Intensify Diplomatic Engagement Amid Regional Tensions
Russia and Saudi Arabia Open Visa-Free Travel Corridor for Citizens
Saudi Oil Output Capacity Reduced by 600,000 Barrels Per Day Amid Regional Conflict
Saudi Arabia Suspends Operations at Select Energy Sites as Precautionary Measure
Saudi Arabia Halts Operations at Multiple Energy Facilities Amid Heightened Tensions
Global Markets Jolt as Iran Signals Ceasefire Breakdown and Rising Regional Tensions
King Street Aligns with Saudi Sovereign Wealth Fund to Expand Alternative Investments in Middle East
Attack on Saudi Arabia’s Jubail Petrochemical Hub Raises Global Supply Concerns
Debate Emerges Over Saudi Strategic Decisions as Gulf Cooperation Council Dynamics Come Into Focus
Saudi Arabia Expands Full Workforce Localisation to 69 Professions in Major Labour Reform
Emerging Alliance of Pakistan, Turkey, Egypt and Saudi Arabia Signals New Regional Power Dynamic Amid Iran Conflict
Iran Linked to Strikes Across Gulf States Following Refinery Attack Escalation
Saudi Arabia Voices Concern Over Fragile US–Iran Ceasefire Stability
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
Saudi Arabia’s Key East-West Oil Pipeline Targeted Following Ceasefire Announcement
Iran Targets Saudi Arabia’s East-West Oil Pipeline in Escalating Regional Tensions
Trump Warns of Civilizational Stakes as Iran Halts Negotiations
Saudi Companies Expand Remote Work Measures Ahead of Iran-Related Security Concerns
Iran Warns of Strikes on Saudi Energy Infrastructure if US Targets Its Facilities
Iran Urges Civilians to Form Human Shields Around Nuclear Sites as Diplomatic Deadline Approaches
Saudi Arabia Raises Oil Prices to Record Premiums Amid Supply Pressures Linked to Iran Conflict
Key Saudi-Bahrain Causeway Closed Amid Heightened Security Concerns Linked to Iran
Formula One Calendar Gap Explained as Fans Await Next Grand Prix
Growing Strain on the Petrodollar System Comes Into Focus Amid Iran Conflict
Reported Strike on Saudi Arabia’s Jubail Complex Raises Global Energy Supply Concerns
FedEx Introduces New Digital Tool to Streamline Imports into Saudi Arabia
Iran Claims Strike on Saudi Arabia’s Jubail Petrochemical Complex Amid Rising Regional Tensions
Taiwan to Source Oil Shipments from Saudi Arabia’s Red Sea Ports
Saudi Arabia Evacuates Riyadh Financial District as Precaution Amid Regional Tensions
Saudi Arabia Balances Ambitious Economic Vision Amid Regional Tensions and Financial Pressures
Budget Saudi Arabia Reports Strong Full-Year 2025 Financial Performance
Saudi Arabia Expands Investment in Capcom With Stake Reaching Six Percent
Saudi Arabia Assesses Significant Economic Impact From Regional Conflict Involving Iran
US Beef Secures Expanded Market Access in Saudi Arabia
×