In recent years, the government have made a number of changes designed to better protect tenants’ rights and to make renting more accessible. Tenants currently face a lot of financial pressures, from raising the initial deposit and costs of moving, to saving up to buy their first home. The government have recognised this and taken a number of positive steps to ease this pressure and make moving more affordable.
The deposit tenants are required to pay makes renting more challenging and can impact big life decisions. Many moves are delayed until the deposit has been saved up and, those moving from one rental property to another often end up paying the deposit for the new property before the old deposit has been released – meaning they have double the funds tied up!
Following in the footsteps of the government, we want to ease the financial burden placed on tenants by launching our No Deposit Option. Under our pioneering new scheme, instead of paying a large, upfront deposit equivalent of 6 weeks’ rent, tenants can opt to pay a small monthly fee. In exchange for this fee, tenants will not only get deposit free renting but can also benefit from a number of added extras exclusive to Leaders; rental payments made under the No Deposit Option will show on the tenant's statutory Credit Report (which lenders view) and, energy bills will be reduced thanks to our exclusive energy tracker tariff.
The tenant is still liable for any damages or cleaning costs and Leaders will carry out the inventory and check-out process on behalf of our landlords. When the tenancy ends, if there are any issues, we will liaise with the tenant to resolve them quickly and efficiently before the next tenancy begins. This gives our landlords extra peace of mind that their property is protected, whilst ensuring tenants are in a better financial position from day one.
How will this benefit tenants?
“Under the traditional deposit scheme, tenants often delay moves in order to save up the upfront deposit, only for it be tied up just in case. Not only does this often delay moves but, it can also make moving from one rental property into another increasingly difficult, as the deposit for the new property is often required before the deposit from the existing property has been released. With deposit free renting, this is no longer an issue” explains Allison Thompson, Lettings Managing Director at Leaders.
Currently, rental payments don’t positively impact a tenant’s credit history even though rent is often the largest regular payment many tenants make. In exchange for the small monthly fee, Leaders’ tenants will benefit from Experian tracking their rental payments to ensure those who pay in full and on time, see a positive impact on their statutory Credit Report.
To further ease any financial strain on our tenants, we’ve partnered with Spark energy to offer an exclusive energy tariff which tracks the market. Tenants are automatically placed on the cheapest tariff based on their actual usage each month, ensuring that their rate is cheaper than all of the Big Six energy suppliers* from the day they move in - freeing up even more funds to go into savings, towards buying furniture or, funding a deposit to buy their first house.
To see our available No Deposit Option properties, click here.
What does this change mean for landlords?
When piloting this new product, many landlords asked the same two questions; “How can there be no deposit?” and, “What happens if the tenant damages my property?”
Landlords can rest assured that, properties marketed under this scheme will be indemnified by Leaders for the equivalent of 8 weeks’ rent – that’s 33% more protection than under the traditional deposit scheme. If there are damages at the end of the tenancy, we will liaise with the tenant during the check-out process to ensure any issues are rectified before the next tenancy begins. It’s a win-win, tenants only pay for the work that’s needed and landlords have the peace of mind that repairs are being taken care of.
Landlords, find out the rental value of your home with a free instant online valuation.
“Under this new scheme, tenants will not only benefit from having better cash flow from day one, but landlords have the added peace of mind that tenants’ rental payments will show on their credit report. Meaning they are motivated to improve their credit history, reducing the risk of missed or late rental payments which will negatively impact the credit history they are building by taking part in this scheme” adds Allison.
The letting process remain the same, from the inventory upon check-in through to check-out, the only difference for landlords being that they get 33% more protection and, Leaders will liaise with the tenants to rectify any issues – meaning less hassle for our landlords and that the next tenancy can begin without delay.
The No Deposit Option was designed with both landlords and tenants in mind, tenants benefit from being in a better financial position but, landlords benefit from the increased marketing exposure and increased interest from tenants looking for property within this exclusive scheme.
To find out more about our Landlord Services, click here.
*based on comparison with the Standard Variable Tariffs of npower, SSE, ScottishPower, British Gas, Eon and EDF using a similar payment method. Prices will be compared every month.