Deposit Replacement for Tenants

Free your wallet from costly rent deposits. Expensive deposits are a thing of the past. Instead, you can secure your new rental home with a small fee equivalent to one week’s rent, paid to Mashroom at or before your tenancy starts.

Deposit Replacement for Tenants
Lower upfront move in costs

Lower upfront move in costs

No need to fork out hundreds upfront – free your wallet from costly rent deposits.

Financial freedom

Financial freedom

Never worry about saving for a deposit or borrowing the money for a second deposit.

No money tied up

No money tied up

No need to wait around for the deposit to be released when you move out.

What is a deposit replacement scheme?

Our Deposit Replacement scheme allows you to move in with our the have the 5 weeks worth of cash normally needed for a traditional deposit. Instead of the landlord asking for a lump sum deposit when you move in, we will help you pay the money, equivalent to one week’s rent (+VAT).

A security deposit protects the landlord against damage to their property, and against the tenant withholding rent. However, the burden of finding hundreds of pounds or more to hand over is sometimes unrealistic for the tenant. 

The Deposit Replacement will spread the burden over a manageable timeframe. However, it is not a tenancy deposit protection scheme. The one week’s rent that you pay is non-refundable and you will be liable for any damages to the property during your tenancy. Any deposit disputes will have to be sorted between the tenant and the landlord as normal.

How much is it?

You pay the equivalent of one week’s rent, paid at or before the start of your tenancy. The total amount depends on your rent. Legally, a landlord is only allowed to ask for five weeks’ rent, in practice the national average tenancy deposit is £997 to secure a rental property. This is a huge amount to find during a financial crisis and on top of the other expenses that come with moving.

You can work out exactly how much you will be paying via our easy to use calculator here.

How much is it?

How does a deposit replacement scheme work?

Once you’ve decided to rent a property and found the one you like, you will need to pay a deposit as part of the renting agreement. This ensures you do not terminate the agreement early without proper notice, withhold rent or damage the property. 

Once you have agreed rent, you then pay the equivalent of one week’s rent (+VAT).  Renting in the UK does not have to put you thousands of pounds out of pocket or force you to borrow the funds while you wait for your previous property’s deposit to be returned. 

When you move out, you will still be responsible for any outstanding money or damage caused. You and the landlord are free to negotiate any termination or end of agreement settlements. This is not a tenancy deposit protection scheme, but a new revolutionary way to pay the deposit.

How does this affect my landlord?

Typically, a landlord receives 5 weeks’ rent for their deposit. However, they receive 12 weeks via our deposit replacement scheme – though you are only paying one week’s rent. So, it works well for them as they get more protection. 

It does not change the exchange at the end of the tenancy, such as the landlord holding deposit funds because of damage or outstanding payments. That is between the tenant and the landlord. The landlord should return the deposit within 10 days if there is no damage, and if there is a dispute then there is an independent adjudicator.

How does this affect my landlord?

Will this save me money?

While it won’t save you money overall, as the additional one week that you pay is non-refundable, it will save you from having to find a huge amount of cash to hand over at the start of your tenancy. 

It will also save you borrowing money if your deposit is locked up in your previous property. In addition to the tenancy deposit, there are also a number of other fees typically associated with renting a property – the rent of course, utility bills, possibly contract change charges or an optional holding deposit. 

Make sure you are aware of all the charges and expenses associated with renting a property. The Deposit Replacement will help you manage your cash flow.

Why is this better than a cash deposit?

Who has thousands of pounds spare to pay a tenancy deposit upfront, let alone when you already have your money locked up in your previous deposit?

Our scheme helps you by by reducing the amount of the deposit so you never have to have a pile of money ready to go when you see the property and landlord you like.

Why is this better than a cash deposit?

Will I get my money back?

At the end of your tenancy agreement, you will receive your deposit back, just as though you had paid your landlord your deposit in the traditional lump sum manner. The landlord is required to hand back the deposit in 10 days. 

However, they will withhold money if there is damage (beyond the normal wear and tear of living in a house) or outstanding fees, such as missed rent. Deposit disputes are between you and the landlord, not Mashroom.

What happens at the end of the tenancy if there is a dispute or a claim?

A landlord may have the right to withhold your deposit if there is damage or unpaid money, such as missed rent. This is still the case with our Deposit Replacement scheme, just as it is with a traditional deposit. 

The landlord is required to place your deposit in the government’s hands, such as Deposit Protection Service, MyDeposits and Tenancy Deposit Scheme, and the tenant must be made aware who holds their deposit. If there is no dispute, you will receive your deposit back in 10 days. 

What happens at the end of the tenancy if there is a dispute or a claim?

How does Mashroom Deposit Replacement work?

Our Deposit Replacement service works the same as a traditional deposit, in the sense it secures the landlord against damage. However, the difference is you are not obliged to pay all the money upfront in one go. 

Like a traditional deposit, the landlord will use the money to cover any damages or outstanding money at the end of the tenancy agreement. 

All properties listed on Mashroom are eligible for the Deposit Replacement. If your landlord is not listed, you can talk to them about it to ensure more protection for them and a quicker move for you.

I want to use Mashroom Deposit Replacement. What should I do next?


Find a property

Firstly, find a property on Mashroom – you’ll be able to see which properties the landlord has advertised with Deposit Replacement. However, if you’re interested in a property that isn’t advertised with Deposit Replacement, don’t worry. 


Make an offer

When making an offer on a property you’ll come to a step which asks you whether or not you’d like to use Deposit Replacement, you’ll need to select yes here.


Wait for response

Next you’ll need to wait for the landlord to accept your offer with Deposit Replacement.

Is Mashroom Deposit Replacement an insurance product?

The Deposit Replacement is all about making it easier for you to pay your deposit without having to find a large lump sum. It saves upfront costs, and makes moving in quicker as you do not have to save, borrow or wait for your previous deposit to be paid. 

Other than the form of payment, it works the same as any other traditional deposit agreement with your landlord. Damages or outstanding payments will be taken out of your deposit at the end of your tenancy agreement, and any disputes must be settled between the tenant and the landlord, or taken to an independent adjudicator

It is not insurance against losing your deposit. 

What happens at the end of the tenancy?

The deposit behaves the same way as a traditional deposit, it is only the form of payment that differs. This means that the landlord has the right to use the deposit to offset any damages to the property. 

Damage that is unusual, like cigarette burns in the carpet, may warrant the landlord using the deposit. Typical wear and tear from living in a home does not warrant a loss of deposit for the tenant. 

What happens at the end of the tenancy?

Am I eligible for Mashroom Deposit Replacement?

All you need to do is pass a referencing check, and then you are eligible. This will check your past history as a tenant and whether you have made payments on time. 

You can speed up the process by asking your former landlord to provide a reference, or ask if it’s OK that they are contacted. As part of the checks, the landlord will check your credit scores too. 

You can improve your chances of passing by electing a guarantor who vouches for you. The landlord has the right to ask the guarantor for rent, should you miss a payment.

How does it work with the Tenant’s Fees Ban Act of 2019?

The Tenant’s Fee Ban Act of 2019 prohibits landlords from charging tenant’s specific fees, including fees to view the property or a fee to perform a reference check. Mashroom supports the Act, and believes the tenant should never be charged unfairly before they have even moved in. 

The Deposit Replacement service is completely optional. It is an alternative, not an addition, to the traditional tenancy deposit and is in line with the Tenant’s Fee Ban Act. It may be for you as it saves you saving a large sum of money for a deposit. Equally, you may wish to go down the route of a traditional deposit payment.

How does it work with the Tenant’s Fees Ban Act of 2019?

Where can I see my Mashroom Deposit Replacement agreement?

You will have a Mashroom dashboard to access all of your products and services selected. It is an easy-to-use system that gives you an overview of your Deposit Replacement fees and payments, along with other products such as Content Insurance, if selected. 

Via Mashroom and your dashboard, you can browse various options that bring being a tenant into the 21st century, streamlining traditional services and processes.

Where can I see my Mashroom Deposit Replacement agreement?

Tenancy deposit
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Approved code
Property ombudsman
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Mashroom is an appointed representative of Adelphi Insurance Brokers Ltd. Adelphi Insurance Brokers Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Their Financial Services Register number is 594620, with permitted business activities being introducing, advising, arranging, dealing as agent, assisting in the administration and performance of general insurance contracts and credit broking in relation to insurance instalment facilities. You may check this on the Financial Services Register by visiting the FCA’s website, or by contacting the FCA on 0800 111 6768