Should I accept a deposit replacement scheme?
Deposit replacement products let a tenant pay a non-refundable fee instead of a cash deposit.
3 min read · Updated 2 August 2026
Overview
Deposit replacement products let a tenant pay a non-refundable fee instead of a cash deposit. They are legal in England and Wales as long as the tenant is genuinely offered the choice of a traditional deposit, but the landlord's protection is contractual rather than statutory.
Practical guidance
- Read the claims process and excess before agreeing — some products pay out slowly or cap the amount.
- Never present the product as compulsory; that risks being a prohibited payment.
- Keep the same inventory and check-out evidence standard, because you still have to prove loss.
Related content
General information for UK landlords and letting agents, not legal advice. Rules differ across England, Wales, Scotland and Northern Ireland — check your local requirements or take advice before acting.