One of London’s largest landlords, Get Living, is going above and beyond what the government envisioned when they suggested scrapping rental fees. The owners of East Village E20, once the site of the 2012 Olympics’ Athlete’s Village, is doing away with fees and deposits, and is even planning to return around £3 million in deposits already paid this July.
But of course, there is a catch.
How the scheme will work at East Village E20
As of 14 June 2017, residents of East Village E20 will not be required to pay letting agent fees of any kind. They will also have the option of signing tenancy contracts for longer terms than are usual.
Lastly, many of them will not be required to pay a deposit to live there. I say many, as not all of the residents there will qualify. Those that do qualify, as explained below, are exempt from the deposit requirement. Existing tenants who qualify will even be refunded their deposits. Get Living expects to return around £3 million worth of these deposits when the programme starts.
Get living says that on average, they only deduct the equivalent of a few days’ worth of rent from the deposit when a tenant moves out, so there is no need for them to hold on to so much money – except in the case of tenants who present a higher than average risk.
Any damages to the property at the end of a tenancy will be paid for by Get Living itself, unless they amount to the equivalent of a week’s rent. If it amounts to more, they will still attempt to recover it from the tenant, or their guarantor.
The catch isn’t all that onerous, but it isn’t as free and clear as one might hope. To qualify for the deposit exemption, each tenant must pass tenant referencing, or secure a suitable guarantor.
If you can’t meet either of these requirements, then you will still have to pay the standard one month’s rent as a deposit to live in East Village E20, or if you are already living there, your deposit won’t be returned.
Will this become ‘the new normal’?
Well, not for small-scale operations, to be sure. Smaller landlords can’t spread expenses across quite so many rental incomes as Get Living, which owns more than 5000 homes. Smaller landlords will still need to collect deposits, if only to ensure that they can stay in profit if a tenant leaves a property badly damaged.
However, larger firms may come around to Get Living’s way of thinking, as they can’t profit from the amounts on deposit anyway, and can expect to find willing tenants faster if they offer alternatives to the hefty deposits that are common today.