The number of tenancies ending in a claim for more than five weeks’ rent has risen to 17%, research has found.
Compiled by Reposit, a leading deposit alternative product, the company examined its own data from tenancy agreements from across the UK that have come to an end during 2024.
It found that in 17% of tenancies, landlords needed to reclaim more than five weeks of rent to cover costs such as rent arrears or damage. This figure has risen by 4%pts from a previous average of 13% in 2023.
During 2024 so far, Reposit found 49% of agreements ended without any costs incurred by the tenant at all.
Ben Grech, CEO of Reposit, said the figures highlighted how cash deposit schemes did not always provide landlords with the right level of protection because they were capped at 5 weeks’ worth of rent.
He said: “Our figures show cash deposits are now inadequate across a significant portion of the market and one which is growing, most likely caused by the cost of living crisis. This inefficiency is why we’re seeing a rising number of landlords and agents choose to offer our FCA-regulated product which provides landlords with eight weeks of cover – 60% more than the cash schemes.
“It’s been a tough year for landlords who have been hit with rate rises and growing costs generally, so they find the extra three weeks of cover reassuring. Equally, tenants have faced affordability challenges, struggling to find the up-front cash for a deposit which is often unnecessary when 49% of agreements end without any costs incurred by the tenant, and there are alternative products available.
“We believe our product offers a solution that works more efficiently and fairly for each stakeholder in the rental process – landlords, agents and tenants alike – which is helpful in this tumultuous economic climate.”
Reposit’s insurance-backed product structure means that landlords are guaranteed payment if tenants owe any charges normally covered by a cash deposit.
Importantly, the tenant remains liable for any damage at the end of the tenancy, with any disputes resolved through an independent resolution service within 14 days.
