"The tide is certainly turning in the adoption of deposit alternatives and that demand is now driven by both tenants and landlords"
- Sam Reynolds - Zero Deposit
The latest research by Zero Deposit has revealed that not only has there been a notable increase in the level of rental market stock offering tenants the option of a deposit alternative, but demand for such services has also increased by 26% year on year.
The firm's own internal data looked at both the availability and demand for rental stock offering its deposit alternative across 14 major UK cities so far this year (Jan to Sept - latest available), before comparing these figures to the same time frame in 2023 to see how the landscape has changed.
The data shows that on an annual basis, Zero Deposit has seen the largest increase across Cardiff, where letting agents offering the deposit alternative via the firm have seen a 31.2% increase in the number of rental properties adopting this alternative deposit option.
Across Nottingham, there has been a 27.7% increase in stock providing tenants with the Zero Deposit alternative, with Sheffield (+24.9%), Liverpool (+16.9%) and Swansea (+14.9%) also seeing some of the largest annual increases.
But it’s not just stock availability where there’s been an increase, Zero Deposit has also seen tenant appetites for deposit alternatives climb.
Across these 14 major cities, the number of tenants opting for a deposit alternative has increased significantly.
Swansea has seen a huge increase of +971.4%, with Brighton (+346.2%) and Cardiff (+185.3%) also seeing increases of over 100%, followed by Bristol (+97.1%) and Nottingham (+64.9%).
Sam Reynolds, CEO of Zero Deposit commented: “The tide is certainly turning in the adoption of deposit alternatives and that demand is now driven by both tenants and landlords.
"We’ve always seen significant tenant demand for our product, but it’s now mirrored by landlords who are naturally looking for greater asset protection. With rents continuing to climb, many landlords are now realising the value of offering greater choice to tenants, allowing them to make their move for a fraction of the cost of a traditional deposit. That’s an upfront cost of just £7.50 per month (plus the Setup Fee) for tenants, whilst guaranteeing a greater degree of protection.
"We’ve been inundated with enquiries since the Competition and Market Authority (CMA) review was launched as the market has become more aware of the fundamental differences between deposit alternatives. Awareness has equally grown due to the Renters Right Bill and Landlord concerns that they have insufficient cover if the worst were to happen. Given our growth and our product fit within the market, we believe deposit alternatives will be the norm within the next three years."
