Deposit Alternative firm claims tenants need multiple...

A deposit alternative service says increasing numbers of renters need multiple sources of funding for traditional deposits.

Zero Deposit says its survey of over 1,000 current tenants found that high rents and deposits are the biggest obstacles to securing a rental property.

When it came to the upfront cost of a rental deposit, 54 per cent stated they had to dip into their savings while 46 per cent apparently required additional financial help.

Some 15 per cent had to rely on the Bank of Mum and Dad, while 11 per cent were forced to wait for their previous rental deposit to be returned from their letting agent or landlord.

Others turned to loans, credit cards, overdrafts and even sold personal items to raise the funds.

And 26 per cent claim they had to delay their decision to move because they didn't have the upfront cost of a rental deposit.

Sam Reynolds, chief executive of Zero Deposit, comments: “Those who can afford to make their move face a very high level of competition when it comes to securing a rental property, but if they can’t act immediately, the chances are they will miss out.

“The high cost of an upfront rental deposit is the driving factor that prevents many tenants from securing their desired rental property. While some are lucky enough to rely on savings or the Bank of Mum and Dad, others are putting themselves in further debt at a time when the cost of borrowing has grown considerably.”

Deposit alternatives are under scrutiny at the moment following a statement from the Competition and Markets Authority that it would investigate the niche sector as it surfaced as an “area of concern” regarding consumer rights.

Deposit alternatives have also been the subject of probes by The Observer newspaper and comment from the Citizens Advice charity in recent years.