The long-awaited Zoopla-backed Zero Deposit scheme has launched, nine months after EYE first unveiled the plans.
The deposit replacement scheme, led by former Zoopla commercial director Jon Notley, has gone live to the public with financial backing from the portal among others.
Connells, LSL, Knight Frank and Acorn Group are all signed up and have invested in the business.
Other agents, so far unnamed, have also agreed to use the scheme.
All users will do so on an exclusive basis, meaning they won’t provide other deposit replacement schemes at the same time but this will be an option alongside the tenant paying a deposit.
Agents will earn a fee for referrals.
The business also has financial backing from Munich Re, adjudicator TDS, JamJar and former Countrywide chairman Grenville Turner.
Tenants will pay the equivalent of one week’s rent for a Zero Deposit guarantee, which is non-refundable and gives the landlord effectively the same cover as a six-week tenancy deposit. This guarantee is backed by insurer Munich Re and is a regulated financial product.
The tenants remain fully accountable for any damage or unpaid rents. Any disputes over claims by the landlord can be sent to TDS, who will review the evidence and provide a fair adjudication. Zero Deposit pays the landlord quickly in the event of an approved claim.
Jon Notley, co-founder and chief executive of Zero Deposit, said: “We are delighted with the level of support and participation that Zero Deposit is attracting.
“We have spent considerable time and resource developing the product with the support of our partners and with the aim of ensuring that Zero Deposit is the best in class.”
“Zero Deposit is helping to solve a real affordability issue for tenants, whilst giving landlords effectively the same protection as the traditional tenancy deposit, and supporting agents by giving their customers another option to speed up the rental process.”
Tim Hyatt, head of lettings at Knight Frank and former president of ARLA, added: “Zero Deposit will support renters entering the market by reducing the upfront financial burden and offering an alternative to the traditional deposit.
“The robust nature of its offering is why we have given it our backing. Given the constant raft of legislative changes taking place in the lettings industry on an almost monthly basis, it is great to see such a positive, well-executed initiative coming to the market.
“As renting is now becoming an increasingly popular choice rather than simply a necessity, it is important that we are able to provide valuable support to help people secure a tenancy.”