No-deposit tenancies attract tenants and protect landlords

Residential letting agents can now offer tempting ‘no-deposit’ tenancies to prospective tenants thanks to the launch of a new scheme to protect landlords’ property by LetsXL. The North Wales based business supports letting agents, and is offering ‘Zero In’ as a radical third alternative to two government-approved methods of handling tenant deposits.

Landlords and agents will otherwise be in danger of losing out when new legislation relating to deposits comes into effect in England and Wales from April 6. This will prevent landlords simply keeping tenants’ damage deposits if their property has been left in a state of disrepair at the end of the lease.

The new restrictions will force landlords either to place deposit money in the hands of a third party while any dispute with the tenant is resolved, or to take out insurance to cover the value of the deposit.

However, ‘Zero In’ enables letting agents provide an assured shorthold tenancy (AST) to tenants without taking a deposit at all. Instead, the tenant simply pays a small administration charge to the agent, and six low monthly direct debits to LetsXL. The tenant remains responsible for the cost of any damage, but ‘Zero In’ will pay out should the tenant dispute, or refuse to foot the bill.

“‘Zero In’ provides two enormous benefits to landlords and agents,” says Wesley Weir, managing director of LetsXL. “Properties become more attractive to potential tenants because the absence of a deposit means they have to find far less money up front. Deposits are usually the equivalent of six weeks’ rent, so it’s a major saving.

“The other big advantage is that if there is a dispute over damages or repairs at the end of the tenancy, ‘Zero In’ will pay the agent’s claim within ten working days. That means they can get the necessary work carried out, and re-let the property relatively quickly.

“We think that’s a big improvement on the two government approved schemes, under which it can take at best 45 days for disputed claims to be decided by arbitration. During this period the landlord either has to cover the cost of repairs, or end up out of pocket because the property cannot be re-let.”

‘Zero In’ will be linked to the tenant referencing services currently provided by LetsXL to around 1000 letting agents in the UK. Although the legislation will apply to England and Wales, 'Zero In' will be available throughout the U.K.

“Letting agencies already suffer from a heavy administrative workload which we work hard to reduce,” says Mr Weir. “‘Zero In’ is simple, cuts down on paperwork, and ensures that client landlords still have peace of mind through knowing their properties are fully protected.”

For further information, visit letsxl.co.uk.