zero % deposits and guarantor companies

squizz11

any pitfalls to zero % deposit
 schemes or using a company for a guarantor rather than someone you know.
May have to use both and wondering if there is anything I need to be aware of.
thanks in advance

Wanderingpomm

It costs you. It’s a new way for agents to make money now fees are banned 

[Deleted User]

Basically you pay a set amount, this insures the property if you damage the property or don't pay rent (check the documents).  Part of it will disappear as fees.  But this doesn't mean you don't need to pay anything if the LL does make a claim.  The company then comes after you for the money.  You may also lose the impartiality that you get from deposit protection schemes.  IMO its a scam.  You are far better off paying a month's rent, knowing there is a formal process to get a fair judgment on any claims the LL may make.

However I have to disagree with the above post.  I saw it appearing four years ago, way before the ban on most LA fees.  However it is just a way for LA's to make money.

squizz11

what about the private guarantor companies.   we have been told we need one as we get partial HB,   but dont know anyone to ask.   this seems like our only option

steampowered

Zero deposit schemes are an insurance product - instead of the landlord having recourse to your deposit if things go wrong, the landlord can claim on the insurance.

You'll have to pay extra to cover the cost of the insurance each month. Unlike a traditional deposit, you won't get that money back at the end of the tenancy, so you'll end up out of pocket. 

However, if you are unable to provide an acceptable deposit, it may be a suitable product for your circumstances.

squizz11

we do have a deposit ,  but because we may have to pay a private guarantor company , it would stretch us more.

if we paid deposit and private guarantor we would have to use credit card and that means having credit cards for longer than we hoped
annoying needing a guarantor as I have not missed a rent payment in 14 years

theartfullodger

I'm waiting for test cases.  These schemes/scams look well dodgy.

Artful: dodgy Landlord since 2000