9 tenancy deposit saving strategies

Paying a tenancy deposit is part and parcel of being a renter but it’s usually the biggest upfront expense. Worrying research recently revealed 1 in 5 tenants get into debt trying to fund their tenancy, with the average UK deposit now in the region of £1,470.

If you haven’t got £1,470 lying around – or if you’re waiting for your current deposit to be released by your previous landlord – here are nine deposit gathering suggestions that might help get you moving and avoid accruing debt:

1. Save ahead of time: if you’re an advance planner, you can put whatever savings you already have and grow the amount by putting the cash in a high interest rate account. Just be sure of the terms and conditions, as some limit how much you can deposit and withdraw.

2. Make lifestyle sacrifices: if you gave up your daily Starbucks caramel macchiato for a year, you’d have enough to cover the average tenancy deposit and some left over! Whether it’s home cooking instead of Uber Eats or a UK holiday instead of an overseas jaunt, a short-term sacrifice will get you to your deposit quicker than being flash with the cash.

3. Ask the Bank of Mum & Dad: while the practice is more commonly associated with buying a property, some parents may be in a position to help fund a tenancy deposit – and they’re less likely to charge interest!

4. Borrow from friends or family: if you have a good relationship with those close to you, you may be able to borrow the deposit amount as a loan. People may be encouraged to help as deposits are refunded, minus deductions for damage and unpaid rent, so they stand a good chance of getting their money back.

5. Check if you’re eligible for a tenancy deposit loan scheme: some companies, especially in major cities, are helping their employees by offering an interest-free tenancy deposit loan scheme. Ask your HR department if they’re running such an initiative.

6. Ask your employer about an advance: even if the company doesn’t offer a specific tenancy deposit loan scheme, they may be willing to grant you an advance. This is usually a percentage of your future salary.

7. See if your bank account has an interest-free overdraft: some banks and building societies let their members go into their overdraft without charging interest or fees. Check if this applies to you but if it does, still plan to clear the overdraft as quickly as possible.

8. Take out a 0% interest credit card: If you nor your family has access to cash, taking out a 0% interest credit card is one way of covering your deposit. Usually, there is an-interest free period – typically 12 or 24 months – that allows you to pay off the debt over time without interest being added. The borrower must, however, clear the debt before the interest-free period ends to avoid extra charges.

9. Start a side hustle: earning a little extra every week is a good way to build a deposit fund. From dog walking and house sitting to selling unwanted items and occasional shifts at a local pub or coffee shop, additional income can help renters avoid getting into debt. You must, however, take financial advice on how extra earnings may affect your tax code.

Our lettings team is on hand to answer any questions you have about securing a rental property. Please get in touch.