As rental affordability tightens across the UK, more tenants are looking for ways to reduce their move in costs. One solution is reshaping the market in 2025: the zero-deposit scheme. Once niche, it is now a mainstream option that is changing how letting agents attract applicants and how landlords let properties in competitive markets, especially in zero deposit rentals London.
What is a Zero-Deposit Scheme?
Instead of paying a large deposit upfront, tenants pay a one-off, non-refundable fee, typically equal to one week's rent. A third-party provider such as Zero Deposit, Reposit or flatfair then guarantees the landlord against damages or unpaid rent, subject to terms and conditions.
This approach provides tenants with financial flexibility while maintaining protection for landlords, which explains the rise in adoption across the private rental sector.
Why is Demand Increasing?
According to Zero Deposit’s Q2 2025 report, more than 34% of new tenancies in Greater London now involve a deposit alternative. In build-to-rent developments, that figure exceeds 50%.
Key drivers behind this growth include:
- Lower upfront costs: Saving tenants an average of £1,300 in London
- Faster lettings: Up to 30% quicker occupancy
- Broader tenant appeal: More interest from professionals, younger renters and relocators
For letting agents and landlords, this translates to shorter void periods and a wider pool of qualified applicants, making zero deposit rentals in London an increasingly valuable deposit alternative for landlords.
Points to Be Aware Of
Zero-deposit schemes are not a free pass. Tenants remain liable for any damage or unpaid rent. All fees, terms, and liabilities must be transparent from the outset.
Reputable providers are regulated by the Financial Conduct Authority, and disputes are handled independently by The Dispute Service.
Zero-Deposit in the Prime London Market
While zero-deposit schemes are gaining traction across the UK, their impact is especially clear in prime London postcodes, where upfront rental costs can be significant. This is not just a trend for city flats, it works for larger homes too!
For instance, this three-bedroom garden flat in Shepherd’s Bush W12 combines generous living space, quality finishes, and a private garden with the flexibility of a zero-deposit option. It allows tenants to move in without a large upfront cost, while landlords retain the reassurance of a regulated protection scheme.
Final Thoughts
Zero-deposit schemes are becoming a core part of the modern lettings landscape. They deliver accessibility for tenants, reduce void periods for landlords and create a competitive edge in busy rental markets.
If you are a landlord considering offering a zero-deposit option or a tenant looking to secure one of our exclusive zero-deposit homes, contact Interlet today to find out more.
