Zero deposit scheme
Deposit replacement products offered instead of a cash deposit.
2 min read · Updated 2 August 2026
Overview
Deposit replacement products let a tenant pay a non-refundable fee, typically one week's rent, instead of a traditional deposit, with the provider covering agreed damage or arrears claims. They must be offered as a genuine choice — the tenant must still be able to pay a traditional deposit.
Legal requirements
- A deposit replacement fee may be a prohibited payment if the tenant is not given a real alternative.
- Traditional deposits must still be protected in an approved scheme.
Practical guidance
- Read the claim limits carefully — cover is usually capped and subrogated back to the tenant.
This wiki entry is 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.