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Horridbloke

Possible new scumbag letting rip-off?

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I just came across this sign in a local lettings agency window. I think it's a new one: instead of putting your money into a protected deposit scheme you just kiss it goodbye instead and save yourself the heartache of claiming it back ever. It seems pretty low if that's actually the case - has anyone else encountered this?

 

new-scumbag-scheme.jpg

Edited by Horridbloke
Corrected a typo

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Deposit Insurance for scumbag renters? Lure em in on a cheeky teaser rate, first fix is always free pal, then when you got em hooked in on a nice little monthly.... BOOM just bang the premiums up on em. They’ll never notice.

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It's paying money for absolutely nothing as far as I can see.

Perhaps we were lucky, but in our twenty years renting (ten years for us, recently, and ten years between our three kids while at uni), we never had any money deducted from a deposit due to making good any damage and adequate end of rental cleaning.

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9 hours ago, Bruce Banner said:

It's paying money for absolutely nothing as far as I can see.

Perhaps we were lucky, but in our twenty years renting (ten years for us, recently, and ten years between our three kids while at uni), we never had any money deducted from a deposit due to making good any damage and adequate end of rental cleaning.

There's a matching poster promoting the scheme to landlords. The gist of it is "get tenants in quicker while enjoying the same level of protection as a deposit gives". I _think_ it's just agents scrambling to replace ridiculous fees to tenants.

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How can this be a viable business model? Now that fees for tenants are a thing of the past and deposits are capped at 5 weeks' rent the number of tenants struggling to pay the setup costs of a new tenancy will be smaller than it was, plus I believe councils will provide a loan to pay the deposit of housing benefit claimants anyway. Who is the target market?

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The Guarantee cost is a one time payment. = 1 week's rent
Annual admin fee = £26
via https://www.zerodeposit.com

So if we assume the avarage tenant stays for 4 years and pays a £1000 deposit on a 1000 PCM rental
1 weeks rent = £200 + (4 x 26) = £304 to borrow £1000 for 4 years
So interest cost = 304/4 = £76 per year or 7.6% APR
 
But if the house turns out to be a dump with noisy neighbours and you leave after 6 months you will pay a bit more
1 weeks rent = £200 + 26 = £226 to borrow £1000 for 6 months
So interest cost = 45.2% APR
 
 
 

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28 minutes ago, Habeas Domus said:

The Guarantee cost is a one time payment. = 1 week's rent
Annual admin fee = £26
via https://www.zerodeposit.com

So if we assume the avarage tenant stays for 4 years and pays a £1000 deposit on a 1000 PCM rental
1 weeks rent = £200 + (4 x 26) = £304 to borrow £1000 for 4 years
So interest cost = 304/4 = £76 per year or 7.6% APR
 
But if the house turns out to be a dump with noisy neighbours and you leave after 6 months you will pay a bit more
1 weeks rent = £200 + 26 = £226 to borrow £1000 for 6 months
So interest cost = 45.2% APR
 
 
 

"but if the house turns out to be a dump with noisy neighbours"

 

no such luxury if you bought it with your borrowed  money.....sometimes renting offers benefits ownership does not

Edited by Spindler

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  • 317 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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