Homelessness charity Shelter recently reported that complaints about deposit protection have increased by 80 percent in the last two years.
North East letting expert Ajay Jagota, says more landlords and letting agents need to ensure they place deposits in protection schemes, or work smarter to ensure both landlord and tenant are protected.
Shelter’s news item announced that tenancy deposit complaint calls to its helpline have rocketed in the past two years, as some landlords and agents refuse to return tenants’ deposits when they vacate.
Ajay, who is the managing director of KIS Lettings, said that his company has worked with a national insurance company to revolutionise tenancies and remove the need for a deposit.
“The initial cost of moving into a property can run well into the thousands so we’ve introduced a ‘nil deposit’ system where our tenants can move in without paying a deposit, they simply need to bring with them a homeowner as guarantor.
“The guarantor scheme has the backing of Prestige Insurance. They recognised that we needed a method of protecting both the landlord and tenant and have worked closely with KIShttp://www.kislettings.co.uk/ to ensure the scheme works. So far we’ve had great feedback from tenants and landlords.”
The guarantor scheme means that, for a property which is £500 per month, a KIS tenant would pay £500 rent in advance plus a £250 admin fee plus VAT. Most tenancies also require a month’s rent as deposit, so the normal ‘move-in’ outlay would be over £1,250. The cost with KIS would be just over £750.
Steve Burrows, managing director at Prestige Insurance, said: “KIS Lettings understands the need to keep costs down, while also providing secure tenancies which protect both the landlord and tenant.
“We’ve worked closely with KIS to understand the issues that can arise and have developed and backed a guarantor scheme which works in everyone’s favour.”
Ajay is also working to keep costs for landlords down by working smarter, reducing operating costs and developing an innovative online account management system which enables him to sustain a low, five percent management fee.