Deposits are “threatening tenancies”, warns Jagota

Deposits are “threatening tenancies”, warns Jagota

More and more renters are being forced to borrow money just to make ends meet – and one property campaigner believes landlords and letting agents are putting tenancies at risk by continuing to ask for deposits.

The FCA this week revealed that British households have run up a combined £200bn of unsecured consumer credit, a figure rising by 10% a year, with FCA Chief Executive Andrew Bailey admitting that the situation “needs government involvement”.

Charity Stepchange has highlighted renters as one of the most affected groups, noting a “trend for low-income families to rely on credit to buy essential items”.


The charity’s annual report states that four out of five of clients struggling with debt live in rented accommodation.

Property campaigner Ajay Jagota was the first letting agent in the UK to abolish traditional tenancies deposits, protecting landlords instead with deposit replacement insurance policies.

He believes landlords and letting agents are risking rent arrears, empty properties and legal costs by continuing to require tenancy deposits.  

He said: “If you ask for a tenancy deposit, you are immediately limiting yourself to tenants who have close to £1000 to hand. More and more of them now have to borrow that money or run up other debts to be able to afford to be your customer.

“By putting them in that position you aren’t protecting yourself, you’re making it more and more likely that your property will stay empty, end up empty or that you will end up facing severe rent arrears or bailiff and lawyers fees.

“As a landlord and letting agent myself I’m not trying to run a charity, but surely it is absolutely senseless to voluntarily put tenancies at risk by imposing a financial burden that only offers a fraction of the £600,000 of asset protection an insurance policy like ours does, and doesn’t offer free legal support and a rent guarantee.  

“My priority is to find and keep good tenants, and there is a better way to do that – and that way is deposit-free renting.”

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Tony Gimple
Tony Gimple 09 Dec 2017

Linking professionalism to limited company borrowing is a flawed concept. Despite S24 etc., limited companies are the most tax inefficient way of running a property business and leave borrowers seriously...

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

It's normal. If you plan to buy a house in one of the most beautiful spots in the country you should pay a high price.

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Evelyn Attwood
Evelyn Attwood 01 Dec 2017

I think that the situation will be the same at December.

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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