Ladybird Living – Your London Estate Agent

Ladybird Living
min yoongi
Feb 02 2023

What can you do if you cannot afford a deposit or rent in advance?

There are a few options you can consider if you cannot afford a deposit or rent in advance. Some options include using deposit schemes, applying for a discretionary housing payment, getting a budgeting advance, or budgeting loan. This blog will discuss the various options available.  


Zero deposit companies: 

Zero deposit schemes may be recommended to you by a property owner or agent. You would not be required to pay a tenancy deposit. However, there may be hidden costs and the money you pay is not refundable at the end of the tenancy. Property owners can only recommend zero deposit companies, but they should not make it compulsory.  


Local rent deposit schemes: 

If you cannot afford a deposit or rent, you can also check whether your council offers a rent deposit or a guarantee scheme. Your council can also give you further advice and suggest other local schemes led by charities. The schemes will support you by either providing you with money to help with a deposit or rent in advance or they will provide you with a written guarantee that the scheme will cover unpaid rent or damage. Most schemes provided by local councils prioritise vulnerable individuals who are facing homelessness.  


Discretionary housing payments (DHPs): 

If you are receiving housing benefits or universal credit, your council may give you discretionary housing payments (DHPs). DHPs can be used to pay for a tenancy deposit, rent in advance, removal costs and rent that is not already covered by your benefits. However, it may be difficult to be considered for DHPs since the council has a small budget for DHPs. DHPs are considered a better option than a budgeting advance as you do not have to pay it back.  


Budgeting advances: 

A budgeting advance is a type of loan that is interest free. Only those receiving universal credit for at least 6 months would be eligible for a budgeting advance. A budgeting advance can be used for a deposit, rent in advance and removal costs. 


Budgeting loans: 

Those who receive other benefits such as pension credits, income support, income based jobseeker’s allowance (JSA) or income related employment and support allowance (ESA) are eligible for budgeting loans. The difference between a budgeting advance and budgeting loan is that a budgeting loan cannot be used for a tenancy deposit, but can be used for rent in advance and removal costs.  


Paying back a budgeting advance or loan: 

While these loans are interest free, it may still be challenging to pay it back if you are on a low income. You usually must pay the Department for Work and Pensions back within: 


  • 1 year if you get universal credit 
  • 2 years if you get one of the other benefits listed 


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