Zero Deposit has teamed up with The Guild of Property Professionals to become its exclusive deposit replacement partner.
The partnership will help to enhance member letting agents’ offering, according to Iain McKenzie, CEO of The Guild (pictured), by providing landlords with a six-week security on their rental property and reducing void periods for landlords.
Removing the barrier of a traditional cash deposit means trustworthy tenants can move in right away, says McKenzie.
“Offering a no-deposit option will boost demand by widening the potential selection of tenants who can afford the rental but may not have a deposit in hand. It will also give agents a competitive edge over their counterparts who are not offering landlords and tenants this alternative,” he says.
McKenzie adds that some landlords might worry that tenants will take less care of the property if they don’t have to pay a deposit, however tenants remain liable for any financial loss or damage as set out in the tenancy agreement.
Landlords are also covered for the value of up to six weeks’ rent, higher than the usual cash deposit which is capped at five weeks. If there’s a claim, landlords receive their settlement within two working days while Zero Deposit’s partnership with The Dispute Service means that disputed claims are reviewed in the same way as a cash deposit.
Tenants buy a Zero Deposit Guarantee for the equivalent of one week’s rent plus a £49 set-up fee, and then pay £17.50 each year. It is underwritten by Great Lakes Insurance SE, part of Munich Re, one of the world’s largest re-insurers and the product is regulated by the Financial Conduct Authority.
This is the first major distribution deal inked by Zero following the departure of co-founder Jon Notley last year, who was replaced as CEO by Sam Reynolds.