Renting platform Fronted has raised £20m from investors to develop a lifetime rental deposits app for tenants.
The company has said it’s decided to go ahead with the project despite the government stalling its plans to usher in lifetime deposits within its much-vaunted rental reform proposals.
Within Fronted’s app, renters will be able to access the lifetime deposit, which will take the form of interest-free moving ‘credit’ and is in addition to its existing product – a 12-month loan for renters who do not have the cash to afford a rental deposit.
Fronted says the new app will be a ‘deposit that moves home with you’ and that it’s designed for people who need to pay a second deposit before receiving the old one from their previous tenancy.
It will work by securing the return of the renter’s old deposit to Fronted and financing the new deposit in full.
Renters will have 10 weeks to pay off what is essentially bridging finance. All – or a portion of which – will be made up from the return of the old deposit.
“Asking renters to come up with another five weeks rent when they already have money protected is ludicrous”, Jamie Campbell, Fronted CEO (pictured).
“Renters should be allowed to pay a new deposit with the one they already have.
“In a world where rent prices are going up, and homeownership is increasingly difficult to achieve, this is another example of a housing market rigged against young people.”
Fronted is seeking to solve a problem with its new app that’s also preying on Ministers minds – how to help tenants pay the deposit on their new rented home while they wait for the old one to be returned.
The landlord who owns the ‘moving in property’ wants a deposit paid as soon as possible to reduce the risk of an empty home.
The ‘exiting property’ landlord wants the money to be available for any deductions after the tenant moves out. On average, renters have a double deposit overlap of 35 days.