Zero Deposit Schemes

As a result of the Tenant Fee Ban coming into effect from the 1st June, we have seen a rise of "Zero Deposit Schemes" being introduced by other letting agencies.  These agents see this as a way to fill the gap that will be left from tenant's no longer being charged fees. As a result of a review of these schemes Lenwell will not be offering them as it is a higher cost to the tenant and there is huge scope to miss-sell the product. Lenwell prides itself on offering a transparent and simple service to all of its customers. 

There are a number of these schemes already on the market, each paying varying amounts of commission to the letting agency, with risks that agencies will choose the ones paying the highest rather than the one most suited to the tenant. ARLA Propertymark analysis showed that commissions paid by deposit-free schemes range from single figures to up to 30% of the tenants premium.  Industry commentators and providers have acknowledged this could create issues, especially if firms are not transparent, as tenants and landlords could be pushed into schemes with varying levels of cover and regulation.

After careful consideration and analysis of the market, Lenwell have decided to not offer these schemes based on the following:         

Because of this and all of the above reasons we are concerned it become a PPI style scenario and agents will need to return premiums and cover could end. This would leave tenancies unprotected.

Award Winning
Safe Agent
Tenancy Deposit Scheme Member
Association of Residential Letting Agents
National Association of Estate Agents
ISO9000 Registration
Award Winning