Agents may be mis-selling deposit alternative schemes

Agents may be mis-selling deposit alternative schemes

Concerns have been raised over "deposit-free" renting being mis-sold to tenants who do not understand the costs involved.

The option allows renters to pay a smaller, generally non-refundable fee in place of a traditional deposit.

Companies and letting agents offering it say it reduces upfront costs.

But campaign groups and the ombudsman have warned some are pushing deposit-free options without making it clear they could cost renters more over time.

A traditional deposit is typically up to five weeks' rent - but this is refunded at the end of the tenancy, minus any deductions for damage or unpaid rent.

With deposit-free options, renters pay less initially - usually a one-off payment equivalent to one week's rent or a monthly fee. But this is generally non-refundable and cannot be used to pay for damages.

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