A leading property expert is urging political parties to use their General Election manifestos to promise the abolition of the deposit – saving the average renter over £1000.
Anti-deposits campaigner Ajay Jagota of sales and lettings firm KIS believes replacing out-dated rental deposits with compulsory landlord insurance is a more effective way of giving renters a better deal than other proposals on the table.
With less than a hundred days to go until the General Election, Britain’s 9 million private renters are set to play a crucial role in deciding the outcome, with all major political parties expected to announce policies designed to appeal to private tenants in coming weeks.
The Labour party this week announced plans to make three-year tenancies the norm instead of the six or 12-month leases most renters currently have, limit rent increases within this period and to ban letting agent fees.
The government this week also announced that if re-elected it may introduce new controls over the buy to let market by limiting lending by banks to buy-to-let investors, similar to last year’s Mortgage Market Review of loans to owner-occupiers.
Ajay Jagota is founder and Chief Executive Officer of the UK’s most innovative sales and lettings business, KIS:
The firm is famous for being the first letting agent in the country to abolish deposits, replacing them with a one-of-a-kind landlord insurance policy offering guaranteed rent, deposit replacement, legal assistance and round the clock third party emergency home repairs.
He said: “We’re bound to see a flurry of new policies targeting Britain’s growing army of renters in the coming weeks, and things like rent caps and bans on letting agent fees will no doubt sound very appealing to many of them, but what they have to ask themselves is this – will these policies actually save them money?
“In Scotland the introduction of rent caps and a ban on letting fees actually led to the cost of renting going up as landlords and letting agents had no choice but to pass their increased costs on to renters.
“If you really want to save renters money, the simplest and most effective way would be to abolish deposits and to replace them instead with landlord insurance policies – they’re an unnecessary cost that benefits no-one, and with the insurance market heavily regulated introducing the system will not require any new laws or further red tape.
“North East renters are currently faced with bills of hundreds of bounds just to get the keys to a new property, and some figures suggest 49% of them had to borrow that money from parents, friends or payday lenders.
“That doesn’t help their landlords, especially when you consider that our research shows that the rent arrears or repair work they might need that deposit for is as much as three times the cost of the deposit.
“We all want a better deal for renters, but the solutions offered have to work.”
KIS manage properties for landlords in every corner of the North East from branches across Tyne and Wear, and were named Letting Agent of the Year in the 2013 Landlord and Letting Awards and a runner up at the 2014 awards. The firm expanded into residential sales in 2014.