More than two million households support the elimination of mandatory deposits for renters

Think tank calls for alternative to help Generation Rent

Polling by YouGov has shown that 43% of renters would support a system of deposit replacement insurance with a small cost rather than the current system of tenants paying large upfront deposits.

A new report published by the Centre for Policy Studies finds the average renter loses over £300 per tenancy due to lost interest and inflation because of participation in the existing deposit protection schemes.

Forcing tenants to pay large up-front deposits mean many people struggle to move between properties. They also lose out on accruing interest on their money which instead is retained by their landlord or letting agency, and often face a real struggle to receive their money back.

In his new report, ‘Down With Deposits: The Case for Rental Insurance’, Brian Sturgess proposes that the Government should promote a deposit replacement insurance system as an alternative, which would allow renters to insure against potential damage or missed rent payments without having to find a large up-front deposit, estimated to average around £1,041.

Such insurance schemes, which could easily be developed within the existing insurance market, would enable renters to retain more of their own money when moving into a property, enjoy the interest accruing during their tenancy, and avoid borrowing from friends, family, or pay-day lenders to gather enough funds for a deposit. The latter would be especially important for the 31% of private renters who have less than £100 in the bank.

An insurance-based model would also allow renters to build up a reputation as a good tenant through a ratings system similar to no-claims bonuses for motor insurance, while landlords still received protection against property damage and missed rental payments.

Crucially, an insurance-based model would significantly improve the lives of ‘Generation Rent,’ at no cost to the treasury.

The YouGov polling showed that tenants would prefer, by 43% to 41%, an insurance scheme to the current deposit system.

The polling contained in the report was commissioned by Zero Deposit, which offers a deposit replacement scheme, but the report and its recommendations were produced independently by Brian Sturgess and the CPS, with no external funding.

Robert Colvile, Director of the Centre for Policy Studies, said:
“This Government have a real opportunity to rectify the damage done by Labour to the rental market. 

“By endorsing an insurance-based model as an alternative to a rental deposit, the Government would rectify an unfair system which polling shows is unpopular with hard-pressed tenants.”

Brian Sturgess, author of ‘Down with Deposits’, said:
“Currently many people are simply unable to enter the rental market due to the need for a large upfront deposit before they move in. I was made aware of a solution to this problem due to the pioneering work of Ajay Jagota at Dlighted who proposed an insurance solution to replace deposits.”

Jon Notley, CEO and Cofounder, Zero Deposit said:
“Our ground-breaking polling shows 43% of people would prefer insurance backed deposit replacement products to paying a deposit (41%).

“I urge the Government to support creating a market in FCA regulated, insurance backed deposit replacement. It would give another option to the millions of renters who struggle with a deposit and make lives easier for Generation Rent.”

‘Down with Deposits: The Case for Rental Insurance’ is available to download from the Centre for Policy Studies website.


For further information, or to book Centre for Policy Studies spokesmen, please contact the Centre for Policy Studies Press Office on 07876 161196 or email [email protected].


  • The Centre for Policy Studies is one of Britain’s leading think tanks, and the home of a new generation of conservative thinking. Our mission is to widen enterprise, ownership and prosperity.
  • Brian Sturgess is Managing Editor and Chief Economist at World Economics. He is the author of ‘The Kindness of Strangers’ (2017) and ‘Not Paved with Gold’(2014), published by the Centre for Policy Studies.
  • Zero deposits was created with the aim of making the moving process more affordable. Tenants pay the equivalent of one week’s rent for a Zero Deposit guarantee, which is non-refundable and which gives the landlord effectively the same cover as a 6-week tenancy deposit. Tenants remain fully accountable for any damage or unpaid rents. If the tenant and landlord do not agree on any claim, the case is sent to TDS, who review the evidence and provide a fair adjudication. Zero Deposit pays the landlord quickly in the event of an approved claim.
  • YouGov polling data – to test the theory that many people would choose insurance over a normal deposit (YouGov/CPS Survey Results – Sample size 745 GB Adults who privately rent, fieldwork 11-14th June)
Imagine that, when renting a home, you have the choice of either paying a deposit to the landlord (usually the equivalent of 6 weeks’ rent, which would be returned at the end of the tenancy minus the cost of any damage) or paying for deposit replacement insurance (usually the equivalent of 1 week’s rent, where you are still responsible for any damage at the end of the tenancy, but don’t have to find the full deposit). Which would you prefer?
To pay a deposit 41%
To pay for deposit replacement insurance 43%
Don’t know 16%


Date Added: Sunday 5th August 2018