Arab Press

بالشعب و للشعب
Friday, Jun 20, 2025

'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
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Syria to Reconnect to Global Economy After 14 Years of Isolation
Saudi Arabia Faces Uncertainty Over Succession After Mohammed bin Salman
Israel Confirms Arming Gaza Clan to Counter Hamas Influence
Majority of French Voters View Macron's Presidency as a Failure
U.S. Reduces Military Presence in Syria
Trump Demands Iran End All Uranium Enrichment in Nuclear Talks
Iran Warns Europe Against Politicizing UN Nuclear Report
Businessman Mauled by Lion at Luxury Namibian Lodge
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
Head of Gaza Aid Group Resigns Amid Humanitarian Concerns
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
×