Deposit replacement schemes: Everything you need to know

March 24, 2021

Deposit replacement options: Everything you need to know

As a landlord or agent using Ome, what do I need to know?

According to a recent widespread survey conducted by Ome in conjunction with their partners, mydeposits, 31 per cent of agents, landlords, and tenants would consider using a deposit replacement scheme in the future. Of those that said they would not consider using a deposit replacement, 77 per cent expressed that their main concern was not understanding how they work.

Here, we’ll address all of your questions surrounding deposit replacement options.

So, what are they? Deposit replacement options are simply an alternative to the traditional upfront deposit.

Born out of renters’ desire for financial freedom, deposit replacements remove the need to pay the traditional upfront cost of the first week’s rent and rental deposit when moving into a rental property.

With Ome’s Deposit Replacement Membership the deposit cost is spread over manageable, non-refundable monthly payments. For many renters, the removal of an upfront deposit is beneficial for managing cash flow.

There are different types of deposit replacement schemes on offer, those offered by letting agents themselves, and those offered by independent companies, like Ome.

This guide aims to clarify the purposes of and uses for independent deposit replacement providers. It will highlight:

If you have any further questions about Ome or deposit replacements, don’t hesitate to contact us via our live chat or email

Who is Ome?

Ome’s Deposit Replacement Membership aims to raise industry standards and rental wellbeing by removing the burden on tenants of providing a traditional five-week cash deposit, whilst keeping the security of a traditional deposit for landlords.

Our membership enables tenants to pay a small monthly membership fee in place of a large upfront deposit, offering a quick end of tenancy process, and the same adjudication services as traditional deposit schemes.

Ome was created to offer greater flexibility, choice, and transparency within the rental market, fusing a desire to reimagine how renting works, backed by the resources and extensive experience of Hamilton Fraser.

The Hamilton Fraser family heritage provides Ome with knowledge gained through more than 20 years of experience in the private rented sector. During this time, Hamilton Fraser has served over 15,000 letting agents, 200,000 landlords and over two million tenants across its associated brands.

For more information visit the ‘About Ome’ section of our website.

What are the differences between deposits and deposit replacements?

Deposit replacement options: Everything you need to know

Traditional deposit schemes require the renter to pay a substantial upfront sum to their landlord or agent, which is usually refundable, but can be deducted from if the tenancy agreement is breached.

Legally, traditional deposits must be protected by the landlord or agent in a deposit protection scheme, like government authorised mydeposits, within 30 days.

Deposit replacement schemes, meanwhile, remove the renter’s need to provide a one-off upfront cash deposit. Instead, the renter purchases a deposit replacement for a non-refundable fee and pays in smaller, more affordable monthly instalments.

How does Ome’s Deposit Replacement Membership work?

Ome’s Deposit Replacement Membership guarantees the same financial protection to landlords as a traditional deposit does, but removes landlords’ legal obligation to register a deposit, therefore also removing the risk of fines for failing to protect the deposit, which can cost thousands of pounds.

Essentially, Ome’s Deposit Replacement Membership shortens and streamlines the rental process for landlords, agents and tenants.

Ome aims to eliminate the admin and bureaucracy of protecting, housing and later releasing a cash deposit; and remove the ‘double bubble’ issue where tenants are forced to fork out for a new housing deposit without receiving their old one from their previous rental property.

Why choose Ome’s Deposit Replacement Membership?

Key benefits for landlords

  • Ome removes the threat of deposit protection related fines, as there is no lump sum deposit to protect
  • Ome’s Deposit Replacement Membership provides equal protection to landlords as a traditional deposits
  • Deposit replacements require less admin than traditional deposits, freeing up precious time for time-conscious landlords
  • Ome’s world class adjudicators are hugely experienced with resolving end of tenancy issues
  • Streamlined disputes because there is no money to manage or collect, therefore landlords can reach resolution much quicker

Key benefits for agents

  • Ome’s Deposit Replacement Membership provides equal protection to traditional deposit
  • Enhanced cash flow options for tenants, reducing potential friction between tenants and managing agents
  • Reduced admin and legislative risk to agents, as the lack of an upfront deposit means there is no deposit to protect

Key benefits for tenants

  • Avoiding the ‘double bubble’ associated with moving to a new rental property, whereby tenants are usually forced to pay a new deposit before they regain their old one
  • Ome’s Deposit Replacement Membership radically reduces the upfront cost of moving to a new home
  • People may prefer to manage their money in monthly cycles, in tandem with their monthly pay packet and Ome offers just that, with a small monthly fee instead of a large upfront sum. Ome is empowering tenants to manage their own money in their own way
  • Ome’s Deposit Replacement Membership is flexible in that payments can be split between a household or managed by one tenant
  • Stress of saving or taking out a loan for a deposit is removed, offering financial freedom to the tenant

How do I set up my membership?

Ome memberships can be set up quickly and easily. The process is almost identical for landlords and agents, however agents will also be required to input the landlord’s details.

Simply follow the steps below to set up your membership:

  1. Add property
  2. Add tenancy details
  3. Invite tenant

Once the membership is set up, Ome will then send an invitation email to tenants to set up payment for the membership, and once payment is set up the landlord or agent will receive confirmation of membership via email.

If you are a tenant, simply wait for the invitation email to set up your membership. The landlord is protected as soon as the first payment has been made by the tenant setting up their membership.

How much does it cost?

Ome’s Deposit Replacement Membership will accost all households a £30 set up fee and a small monthly subscription for the duration of the tenancy – starting at just £5 a month (which can be split between the household).

Nine out of ten tenants will pay less than £10 per month. That means tenants have the option of either a five weeks’ rent equivalent cash deposit or around one day’s rent equivalent Deposit Replacement Membership plus the small monthly subscription.

Ome’s household membership price increases by £5 for every extra £500 a traditional deposit would have cost.

Ome price table

What are my responsibilities?

Landlords and agents

In order to provide tenants with adequate choice, it is a legal requirement to offer a traditional deposit protection alongside deposit replacements.

You cannot force someone to use a deposit replacement option otherwise this can be classed as a fee, which is illegal in line with the Tenant Fees Act.

We also ask that you make sure your tenants meet our minimum referencing criteria and conduct check in and check out reports before inviting tenants.

There is no need to protect the deposit, there is no issuing of prescribed information within a time frame, and no risk of receiving fines as a landlord – which can be up to three times the deposit plus the deposit itself in some cases.


Tenants still have the same responsibilities as they would have with a traditional deposit, in terms of paying all the rent and bills as per the tenancy agreement. Tenants must also compensate the landlord if any damage is incurred.

At Ome, we are big on transparency and fairness.

We think it is only fair that landlords are reimbursed if something is broken or the tenancy agreement is breached. Our deposit replacement is not an insurance product and the tenant must comply with any privately agreed or awarded settlements as agreed by our adjudicators.

Frequently asked questions

What makes Ome different from other deposit replacement schemes?

Recently, deposit replacements have started to become more popular, as renters seek flexibility and new ways of renting.

Competition has increased, as well-known names in the industry have joined start-ups and agencies have started offering in-house alternatives. But Ome’s expert knowledge  and rental wellbeing hotline make it a unique option for renters seeking a change.

‘Do-it-yourself’ replacement options are often offered by agents themselves and have been the target of criticism by some tenants who feel they were mis sold.

The cost of ‘DIY’ deposit replacement options are often extortionate in comparison to other replacement options. Ome’s Deposit Replacement Membership is up to seven times less expensive per month compared to other popular agent run memberships.

For more information about the risks of these ‘DIY’ replacements, read the PRS blog, What are the risks of ‘do-it-yourself’ deposit replacement schemes?

What happens when our tenants move out?

When your tenants move out, simply let us know by ending the tenancy in the Ome portal. Once they have left the property, you and your tenant will be able to discuss any end of tenancy settlements based on the evidence in the checkout report. If you are both happy with the proposed settlements, the tenant can pay you and you can both part ways.

What happens if our tenant disagrees with our proposed end of tenancy settlements?

Sometimes tenants and landlords struggle to agree on end of tenancy settlements and that’s OK!

Our world class resolution team have been resolving deposit disagreements for mydeposits (one of the traditional government authorised tenancy deposit schemes) since 2007.

You can find out more about how our resolution service works here.

What happens if our tenant still doesn’t pay?

If, after our resolution team decides the tenant owes you, the landlord, some or all of the proposed end of tenancy settlement, and they do not pay, we will step in and make sure you, the landlord, receive the money you are owed.

Tenants contractually agree to reimburse us should such a situation arise and therefore we’ll take over the responsibility of reclaiming the money from the tenant, by legal means if necessary.

Read the full list of our frequently asked questions and answers here.

So, why not sit down, relax and make yourself at Ome?

Did you know at Ome we have our own Rental Wellbeing Hotline? We developed it to support those that may have found themselves suffering mentally, physically, or financially without a clear path to turn to for help.

Deposit replacement options: Everything you need to know

For more information on our Deposit Replacement Membership please contact us at