London mayor Boris Johnson has backed a Shelter proposal that employers should be able to offer tax-free loans to staff to help with rental deposits. Johnson issued his own call at the Conservative party conference, after his housing team met with Shelter representatives to discuss the idea.
Shelter said that Johnson is right to back the initiative, saying that the average deposit is now £979 nationally, and a lot more in London.
A Shelter survey of private tenants in 2012 found that 19% borrowed money to pay their tenancy deposit, with some using payday loans.
Shelter says there is a clear opportunity for employers to provide an alternative, safe source of tenancy deposit funding as a benefit to their staff. It points out that many employers already offer their staff tax-free loans for travel season tickets.
Shelter is putting its money where its mouth is, and is to start offering its own staff interest-free loans of up two months’ salary in order to fund their deposits.
Once their deposit is paid and the rented home secured, borrowers will repay the loan via monthly pay packet deductions.
Source: Letting Agent Today