Industry figure Eddie Hooker has called on the government to ensure that its plans for a lifetime deposit scheme take account of the existing innovation within the sector.
The Hamilton Fraser CEO, whose company operates deposits replacement platform Ome, government-approved deposits service MyDeposits and the Property Redress Scheme, says the deposits sector as a whole is already making progress towards a more varied offering with the rise of alternatives alongside traditional deposit protection.
This includes monthly payment of deposit replacements, carrying deposit protection over from tenancy to tenancy – a form of lifetime tenancy – and also giving landlords the same protection against damage and rent arrears as a cash deposit.
Sometimes called ‘deposit passporting’, the government’s proposals due to published in a White Paper this Autumn will see a tenant’s deposit move from property to property without being returned to them, with the tenant required to make up any shortfalls due to deductions.
This will end the problem of deposit overlap when a tenant must pay the deposit for a new property while waiting for the previous one to be returned.
As Hooker points out, there is now a plethora of products and services offering some or all of the features that constitute a lifetime deposit, some based on insurance-backed, others on membership.
He says Ome, which is Hamilton Fraser’s deposit replacement product, is as near to a lifetime deposit as the commercial sector achieves.
“Ome offers both a monthly payment model, transparent product literature as well as capping the protection to the landlord at the same level that would be provided by a traditional deposit… the mission is to offer real choice to the tenant while providing the same protection to the landlord as if they had taken a traditional deposit,” he says.
“Deposit replacements can evolve in the UK and become a real option for many of the UK’s renters and landlords.”
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