More than one million landlords could utilise deposit alternatives if government proposals to discontinue insured tenancy deposit schemes are implemented, according to research by Zero Deposit. The firm found that 9% of landlords would directly transition to a deposit alternative, which it estimates could account for around 266,736 landlords.
A further 26% of landlords indicated their decision would be contingent on tenant preference, potentially adding another 755,751 landlords to the market for alternative solutions. Conversely, two-thirds (64%) of landlords would opt for a traditional custodial tenancy deposit scheme.
Sam Reynolds, chief executive of Zero Deposit, stated that landlords are approaching potential changes to tenancy deposit legislation pragmatically. He noted that while many would move to custodial schemes, a significant proportion are open to alternative solutions, particularly those offering greater flexibility for tenants.
A survey of 800 private landlords revealed that protection against property damage was the most important consideration for 25% of respondents. Faster dispute resolution was prioritised by 17%, and 16% highlighted regulatory certainty. Over half of landlords (58%) expressed a desire for the flexibility to offer tenants multiple deposit options if insured schemes were abolished.