"We’re also noticing a marked increase in the number of landlords willing to offer the choice of a deposit alternative on their properties because they receive double the protection of a traditional deposit at a time when rent arrears have been on the rise"
- Gary Wright - flatfair
Deposit alternative provider, flatfair, has reported record figures for the first quarter of 2024.
The company says this is because their deposit alternative, No Deposit, has tangible benefits not just for tenants but for agents and landlords, too.
CEO Gary Wright believes the significant rise in tenant preferences can be attributed to increasing rents.
He said: “According to research from Homelet, rents were 7.9% higher than the same period last year. That means the average 5-week traditional deposit rose to £1,617 – higher than ever before.
“flatfair tenants, however, were able to save £1300 on their upfront move-in costs by using our deposit alternative at a time when the cost of living continues to impact affordability.
“We’re also noticing a marked increase in the number of landlords willing to offer the choice of a deposit alternative on their properties because they receive double the protection of a traditional deposit at a time when rent arrears have been on the rise.”
Growing concern for rental arrears
According to a rental report released by Uswitch last month, the percentage of landlords reporting rental arrears from tenants was 35% in Q3 2023. Online mortgage lender Molo reported that landlords in the UK were experiencing on average 2.9 late payments per year and 44% of them were worried about the levels of arrears for 2024.
Wright explained: “With our deposit alternative, landlords receive market-leading protection on their property of up to 10 weeks for damages and/or rent arrears. This is double the amount possible with traditional deposit and it doesn’t cost them a penny. If there are any damages or unpaid rent, landlords are paid within 10 days of charges being agreed.
“We will attempt to collect any outstanding charges over the 10 weeks whereas with a traditional deposit, landlords must attempt to recover these costs themselves, which is often a fruitless and exhaustive task.”
Wright says agents using flatfair benefit from valuable time savings too, from the company’s partnerships with the major CRM’s.
“Our deposit platform is integrated with many of the core CRM’s in the industry. Most recently, we have partnered with Reapit, so agents can create tenancies at the click of a button when using Reapit’s software, as they automatically generate on flatfair’s platform,” he said.
“Looking ahead, we have plans to integrate with even more CRMs to save agents time and money.
“Agents increase revenue with every No Deposit plan selected – and with demand at an all-time high, many are generating a significant revenue stream with flatfair.
“Even when tenants prefer to use the traditional deposit, our partners report saving up to 60 minutes of admin time per tenancy as we register all their traditional deposits with their preferred scheme.
Wright concluded: “Because we automate the process, we remove the potential for missed deadlines and human errors. This protects agencies from incurring any hefty fines for non-compliance which have been reported recently.
“So regardless of which deposit option their tenants choose, letting agents are benefitting.”
