Helping renters who can't afford deposits

At the Conservative party conference we heard Boris Johnson once again join our call for building vastly more affordable homes. It’s another voice for the cause, and one which we welcome.

However, alongside this, he made a small practical recommendation which may have been missed by many – but is still of significance to renters up and down the country facing soaring renting costs and ever-mounting bills.

The London mayor backed and promoted our vision for employers to offer tax free loans to their staff to help with rent deposits (Not loans for deposits to buy a property, as many on Twitter and even some in the media took him to mean!) This is an idea we’ve recently proposed as an immediate practical suggestion to help thousands of renters deal with the ever-rising cost of renting – and just a few weeks ago we discussed it with Boris’ team at City Hall.

The Mayor is right to highlight the issue. Rents and deposits for private renters are sky-high, with the average deposit now costing an enormous £979 nationally – and significantly more in London. These sums are out of reach for many – and sometimes hard to raise even for those on a decent salary.  For the poorest would-be renters, there may be council deposit loan and bond schemes, but countrywide coverage is patchy and those in work are often ineligible.  Given this, it is no surprise that many people borrow money. A Shelter survey of private tenants in 2012 found that 19% borrowed money to pay their tenancy deposit. Borrowers secured funds from a number of sources, with some resorting to highly risky payday loans. 

With the difficulties and risk of borrowing, there is a clear opportunity for employers to provide an alternative, safe source of tenancy deposit funding as a benefit to their staff. And this is already possible. Employers are entitled to offer their employees tax-free loans of up to £5,000, which many already do for travel season tickets.

At Shelter we’re already exploring our own version of this. Soon our own employees will be able to borrow up to the value of two months’ salary interest free. Once their deposit is paid and rented home secured, borrowers will repay the loan via monthly pay packet deductions. We are proud that this scheme will help our staff to live in safe, secure homes, without incurring risky debts or suffering financial hardship. And it gives us an opportunity to remind our staff to check that their deposit is protected.

We therefore echo Boris’ call, and encourage employers around the country to help their staff pay rent deposits. Tens of thousands could benefit from this immensely practical yet simple measure. And it will help make sure everybody has a safe and affordable home to live in.

If you would like to discuss how your business can benefit from offering tenancy deposit loans, or you are already implementing a similar scheme, please get in touch. We’d love to hear from you!

Chris Thorne (

One Comment
  1. Hiya me & my husband & two daughters are looking to rent a house but they want disposit upfront and we can’t afford it straight up. I got told you can help people who struggle with bonds
    Really hope you can help us

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