Member Article

London renters now need £3000 deposit just to move house

London landlords and letting agents could be costing themselves tenants by requiring them to pay deposits of up to £8650 just to move into a rented home.

Research from deposit-free renting firm Dlighted has revealed that the average London tenancy deposit could now stand at £3014 - even when capped at the equivalent of 6-weeks rent by the government’s draft Tenant’s Fees Bill.

Renters in Kensington and Chelsea face eye-watering average deposits of £8650, with Westminster renters needing to find £8081 on average just to be handed the keys to a new property.

Bexley renters face the capital’s lowest deposits of just £1655, followed by Havering (£1731).

According to Dlighted’s figures, the top five most expensive London’s boroughs for deposits are as follows: Kensington and Chelsea - £8650 Westminster - £8081 Camden - £5894 Hammersmith - £5490 Wandsworth - £3569

The five cheapest boroughs on the other hand are: Bexley -£1655 Havering - £1731 Croydon - £1808 Sutton - £1848 Barking and Dagenham - £1898.

Hackney (£2995) is London’s most average borough for deposits.

The recently published English Housing Survey revealed that 30% of homes in the capital are now privately rented, with private rented homes overtaking owner-occupation as London’s most popular form of housing tenure.

With 862,000 households in London living in the private rented sector at the time of the last census, this could mean £2.6bn sitting in tenancy deposit accounts lost to the capital’s economy.

Ajay Jagota is Managing Director of Dlighted, and head of the #ditchthedeposit campaign, which is attempting to persuade the government to encourage landlords and letting agents to abandon traditional deposits in favour of deposit replacement insurance policies, and to transfer existing deposits into Help to Buy saving accounts for first time buyers. Depost free renting allows tenants to rent with zero deposit, while giving landlords more than £600,000 of protection against property damage, unpaid rent and legal costs – 200 times more protection than an average London deposit.

Ajay said:

“Recent research showed that a quarter of UK families have no savings, and another quarter have less than £100 in the bank. Asking them to find more than £3000 just to become your customer is simply terrible business.

“It’s obvious: Restricting potential renters to people who have thousands of pounds in the bank, or risking renters getting into a huge amounts of debt just to rent with you costs you customers. Deposit free renting makes it easier to find and keep good tenants, whilst offering you 200 times more protection against damage and rent arrears.

“It’s also bad for the wider economy to have £2.6bn of Londoner’s money gathering dust or gathering interest for someone else when it could be used to help them get a foot on the property ladder, or to save for the future”.

85% of tenants surveyed said that they chose a particular property or letting agent because it allowed them to rent without a deposit.

This was posted in Bdaily's Members' News section by John Hart .