No more rental deposits? InsureStreet launches a trust-based property rental solution
UK start-up, InsureStreet, is set to solve a major issue in the rental market and potentially pump nearly £4 billion of ‘dead money’ back into the UK economy by replacing cash deposits with trust-based deposit replacement insurance.
The app, whose backers include serial entrepreneur Vin Murria and insurance provider HISCOX, presents ‘generation rent’ with an easy and affordable alternative to the often crippling upfront cash deposits required by landlords.
InsureStreet comes at a time when rent rises across the UK have far outpaced wage increases over the past five years – and at a time when more misery is predicted for renters with further steep rises expected over the next few years, particularly in London. However, with a shortage of affordable housing, more and more people have no choice but to rent.
How InsureStreet works:
Typically, renters are charged a minimum of six weeks’ rent as a security deposit, plus agency fees and a month’s rent in advance.
InsureStreet provides renters with a digital RentPassport™ that validates their profile and then provides renters with an instant insurance quote to cover their deposit.
Instead of paying a traditional cash deposit, renters make a one-off payment for an insurance policy that covers them for the duration of the rental contract. In most cases, that one-off insurance payment is less than a tenth of what you would pay for a traditional cash deposit.
The platform rewards good behaviour through lower policy premiums at renewal.
For landlords, the fear of unknown renters forces them to take cash deposits to cover any losses. InsureStreet replaces that fear with a trusted renter profile and an insurance policy, backed by HISCOX.
InsureStreet has also partnered exclusively with Experian to offer renters the option to choose to pay their rent on the app and help improve their credit score.
With nearly two out of five UK households renting their home and home ownership at its lowest level for a quarter of century, this new data-driven approach also has the potential to channel £4bn of dead capital back into the UK economy, as well as free up often badly needed cash for renters. According to the latest figures around the Tenancy Deposit Scheme, right now more than £4bn is tied up in rental deposits schemes, and £1.25bn of that is in London alone.
Tahir Farooqui, founder and CEO of InsureStreet, says: “We believe change comes from within, especially in an industry that has been blighted with mistrust. In championing social mobility, we chose to lead by example and empower our customers to do the same; together we can grow and evolve as positive agents of change. Our goal is to make it easier for good tenants to find nice places to live – especially in large cities where rent is inflated beyond their means.
Martin McBrearty, head of underwriting partnerships at HISCOX, comments: “The launch of InsureStreet is an exciting development for the rental market. Its RentPassport™ will connect tenants with agents or landlords digitally, making the whole rental experience more trusted and flexible. We’re really pleased to be involved.”
The company has secured initial funding from angel investors including Vin Murria, one of the UK’s top women entrepreneurs, along with other angel investors including Charles Burgess, Christopher Raymond McKee, Nick Martin and Catherine Hardiman.
The London-based start-up, which is regulated by the FCA, is selectively piloting with trusted and reputable insurance partners including HISCOX, Experian, Urban Spaces, Get Living, Quintain (Tipi), Essential Living, Atlas Residential, Walten & Allen and Fifty Thousand Homes.
It is also one of only five insurance start-ups to be chosen as part of the Accenture FinTech Innovation Lab.
