Deposit alternative seals agency proptech platform partnership to target thousands of tenants

Reposit has partnered with agency proptech platform Tenant Shop to offer its deposit replacement scheme.

Letting agents and their landlords will be able to offer the Reposit scheme to renters through Tenant Shop from April.

Tenant Shop is a utility and tenancy management software platform that traditionally helped lettings agents offer landlords energy and broadband tariffs.

It has more than 1,000 partner agents and was used by 23,000 tenants alone last year to switch and save money on their energy bills.

Rather than a change in direction for Tenant Shop, a spokesman said it was already focused on agent and landlord services through its SULU platform that helps them manage tenancies.

The spokesman said: “With the new fee ban coming into effect there is even more of a need for letting agents to focus on business efficiency, reduce administration costs and introduce new revenue streams.

“We are continually expanding the portfolio to address these themes for our agents and their tenants.”

Glenn Seddington, senior representative for Tenant Shop, added: “We select our partners very carefully taking great pride in offering our agents best in class solutions. We did a significant amount of due diligence to find the right security deposit alternative and we feel that Reposit offers the best product on the market.

“This is a key addition for us as more and more tenants look for a new way to rent property without the hassle of a deposit. We are delighted to offer it to landlords and tenants through our existing and new letting agent partners.”

Jude Greer, chief executive of Reposit, said: “We try and make sure that we partner with companies that have a shared vision as well as product standards that match our own.

“We are delighted to be partnering with a company that has such a strong reputation in the market, as well as the opportunity to offer many thousands of tenants and landlords the option of using Reposit.

“Our mission is to make renting more affordable and accessible to tenants, and this partnership takes us one step closer to that goal.”

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10 Comments

  1. TimSpinks52

    The fundamental flaw in the deposit replacement services is fully explained by Reposit’s Chief Exec in the last sentence – no mention of protecting the landlord whatsoever. Protecting the landlord is the fundamental purpose of a deposit and something which replaces it should be focussed on that. From the tenant’s perspective although this type of product may make it more affordable initially it makes it more expensive for the tenant – they get their deposit back, but they don’t get this fee back.
     
    Without the impending fee ban this type of product would have no traction whatsoever, the product has been around for years in one form or fashion and agents have rejected it. Now that we have a requirement to make some additional revenue it is suddenly a great idea? These schemes will be adopted, in the the two or three years that they exist, by agents who can’t think of anything else to do. They will pretend to their landlords that it will make the property easier to let when they know deep down that lack of tenants is not a real problem.
     
    In reality the sales pitch to the landlord, if truthful, should be “This is completely untested, we don’t fully understand it other than what the adverts and salesman said, we have no idea how many tenants understand that they are still on the hook for all unpaid rent and damage they cause, no idea how many tenants will pay if they damage the property, no idea what tenants are going to write on our Google reviews when they find this out in a couple of years time, no idea how any insurance backing the product will react when it realises that tenants don’t fancy just coming up with a couple hundred quid for a carpet clean, no idea they have got their figures right and no idea if the businesses behind it are going to be in business when your tenancy comes to an end. There is no advantage to you whatsoever other than the fact that we make £30 every time we sell one of these so can charge you slightly less. Could you sign here to indicate your agreement to this please?”
     
    It is very easy to sell your services to landlords who have had another agent offer them this solution.

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    1. Jude Greer

      Thanks for you comment Tim, and I completely understand why you would make those assumptions.
       
      We have had many articles in the press around the cover for the landlord including the previous article by PIE which shows we increased our cover to 8 weeks rent following the announcement that landlords will only be able to ask for 5 weeks rent as a cash deposit. We understand at Reposit, that for a product to be successful it must work for every stakeholder in the chain. I wanted to address a couple of the points in your comment. (I will take this moment to mention that I can only speak for Reposit here, not the wider industry.)
       
      Tenant’s get their deposit back
       
      Yes, in 70% of cases they do, and in most cases they immediately put it away again when they move into another property. Tenants are renting longer, on average 10 – 15 years, and they may even add to this deposit as rents rise year on year. There is also the cash flow issue of waiting for the previous deposit back. Research shows 49% of tenants get into some form of debt with rental moving costs. The idea that they get their deposit back presumes they all have the cash in the first place. Tenants obviously would not make their agent or landlord aware of this, because they would fear losing the property. Having said all this, I would never say that Reposit is for every tenant. The tenant must be free to choose whether this is a product they wish to use.
       
      Untested product
       
      Having been around the longest, we have proven the model works in the sense that the data does not deviate significantly from the existing deposit schemes data and have published the highlights on PIE:
       
      https://www.propertyindustryeye.com/dispute-rate-looks-similar-to-traditional-schemes-says-tenancy-deposit-replacement-firm/
       
      There is actually very little difference in tenant behaviour from that of a cash deposit, and in the cases the tenant either cannot or will not pay the landlord back via Reposit, that is why the landlord is provided with an insurance guarantee.
       
      The claims data was favourable enough that our insurer authorised us increasing our cover from 6 to 8 weeks rent.
       
      Granted, it is still early days, but to say it is completely untested isn’t correct.
       
      Tenant awareness
       
      Via Tenant Shop’s software, every tenant will actively choose which route they want to go down, and the Reposit option will be fully explained as a part of the tenant journey. We also provide training to all agents that partner with us directly, and the tenant is made aware when they sign up with us how Reposit functions.

      I hope this helps, and would again remind you that I can only go off the data that we at Reposit have gained over our years of operating. It is a fascinating space and my biggest recommendation would be to advise all landlords, tenants and agents to do their due diligence and research before looking into new offerings and products. Do let me know if you would like to discuss it further – happy to have a chat.
       

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      1. seenitall

        I can see you have said your company have been doing this for a few years.     
        Who does the negotiations over the dilapidations and if to charge or not?
        How do you see the change in legislation to 5x weeks deposit affecting the view of a tenant to pay 1x weeks rent non refundable and still liable.           20% is a high margin.
        The govt in further years are likely to change the 5x weeks max to 4x weeks or even lower.  How would that affect the viability of your company?
         
        The directors of Reposit  –  I see one has 52 appointments some of which are active some of which are dissolved. Did many fail?
        another has had only one other company which was dissolved via a compulsory strike off.  thats not good is it.
        Reposit group ltd. -Only been trading for a few years  – hardly a long track record and micro accounts only.   What would happen if the company goes bust during the duration of a tenancy?
        https://beta.companieshouse.gov.uk/company/09581330/officers
         

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        1. Lil Bandit

          Seenitall, but done nothing! Time to move out of the cretaceous period, champ.

           

          I like these new deposit products and I think in the future they will be a normal and accepted option. I also suspect that post fee ban we may see alot more players moving into the space.

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        2. jackbarnett

          Reposit is a broker – the insurance is provided by an underwriter, so why would anybody be effected if Reposit were to fail?
          In regards to a disolved company, that just means that someone tried and didn’t manage. We should all aspire to try until we success – failing with one business does not reflect badly on anyone.

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      2. jackbarnett

        We have been using Reposit since the early days…

        It has changed the way we work; our tenants can move in with less money tied up, and they are fully informed on a recorded line of the charges which would apply should a claim be made at the end of the tenancy. It is easier to claim from than a regular deposit, and their arbitration process is much better than the DPS.

        Bottom line: Easier for tenants, easier to claim on for agencies (providing that you do everything correctly – ie that you have an inventory), no faffing about with prescribed information and solicitors signatures on claims. What’s not to like…!

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        1. seenitall

          due diligence and all that.  Genuine questions about why and sustainability. Use reposit – makes my job easier to convince landlords to us as an agent that takes a real deposit for the various reasons mentioned already. Perhaps we are more careful with the tenants that we find and criteria that we accept? A compulsory strike off for a director is not a good record though.   Im all for new business but it has to add value or do some real benefit.  There may be some benefit about not having to serve the prescribed information/going via a deposit scheem to the agent but overall I dont see it.

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  2. seenitall

    Agree with Tim above.

     

    No benefit to the landlord.    Im already having joy when talking with new landlords about why a deposit replacement scheme is not in their best interests.    It  puts in tenants who is not as financially secure as one that can pay the full deposit.     I forsee that there will be so many claims on the policy and it will be uneconomic for these companies to run. The admin to resolve is large, its arguable that it may be a banned fee, its unclear if its a regulated product.    Too many risks.       You know what lets find the best tenant that can actually afford to live in that property and pay the full deposit !   it may catch in with Landlords. 😉

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    1. LetGreed

      People who have nothing to lose don’t care as much, its human nature. When the Reposit fee is paid then they ‘think’ they are in the clear when they check-out BUT how will Reposit cope when they have to pay out for damage they cannot re-coup from x-tenants -simple they won’t pay out or will go bust.

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      1. DASH94

        Totally agree. – No actual deposit = no vested interest,

        Tenants should view the deposit as quasi savings scheme for tenants.  The scheme keeps their money safely until they give the home back in decent condition with the rent paid up to date.

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