Deposit alternative supplier Reposit has reported more than a 25% spike in sales over the last year among tenants selecting properties with an above average rental cost, demonstrating how demand is growing for the product within this sector of the market.
The company analysed its data from March 2023 to March 2024 and found there had been a 26.8% rise in sales among one and two person tenancies, with each tenant paying above the average rental cost of £1,029 pcm.
While the average rental cost for all properties is currently hitting £1,121 according to Reposit data, £1,029 was the average cost of one and two person tenancies from March 2023 to March 2024.
Tenants who choose Reposit pay one week’s rent as a non-refundable fee instead of having to find 5 weeks’ rent at the start of the tenancy. It also gives landlords more protection with 8 weeks’ worth of rent. 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.
According to Reposit data, the average five week cash deposit is now £1,293, meaning the average Reposit costs £258.60. For tenants who choose Reposit, this leaves a remaining sum of £1,034.40 to use as they see fit.
Ben Grech, CEO of Reposit, said: “This latest figure shows our FCA-regulated product is recognised as a valuable solution by tenants, landlords and agents across a growing portion of the lettings market.
“More and more tenants who have access to a lump sum are choosing a deposit alternative because they believe it’s a smart choice. They want to reap the benefits of high interest rates and actually earn money on their cash which would otherwise be locked away in a cash scheme for the duration of their rental contract. Or they’re keen to spend the money on a purchase which meets their needs now, such as a holiday or furniture.
“Landlords also benefit with eight weeks protection instead of the usual five weeks rent completely free of charge.”
Agents have also reported the growing uptake of Reposit among a broader portion of the lettings market.
Samuel Fitz-Hugh, Co-Founder of Settio, a lettings and management specialist with head office in Manchester said: “While our referencing requirement remains above industry standard at 3 x rental income, and average rent sits just over £1,600pcm, we continue to see a rise in Reposit uptake at Settio – last quarter 49% of all lets opted for Reposit. These occupants are not restricted by cash flow to ‘afford’ traditional deposits but we’re seeing them prioritise convenience and flexibility with their cash. Some higher value renters with long term tenancy plans have also been seen to prioritise investment of their cash, expecting to make returns beyond the cost of a Reposit.”
Paul Buck, Sales and Lettings Director at Boydens estate agents said: “Despite having the means, many tenants are shunning the traditional cash schemes in favour of a deposit alternative. They don’t want their money locked away for months or years on end, instead they’re opting to keep their cash close to hand with immediate access.
“There’s been a misconception for a long time that tenants who cannot raise a five week lump sum cannot afford to pay their rent but that mindset is shifting as the benefits of deposit alternatives become more understood. Landlords are now more accepting of the schemes as they realise they can receive up to eight weeks of protection.”
