One in five renters has borrowed money that needs to be paid back for their five-week cash deposit, putting them in a precarious financial position before moving in.

Deposit alternative supplier Reposit’s poll of 1,000 tenants found that of this group, 6% had secured £1,500 or more.

At the same time, 18% borrowed between £1,000 and £1,500 and 24% obtained between £500 and £1,000.

Its previous poll found that 38% of tenants were relying on friends and family, credit cards, personal loans, or overdrafts to help cover their lump sum. However, not all this debt was necessarily repayable.

Tenants from across all age brackets and in each region of Britain are now turning to credit to pay for their cash deposit, which typically costs about £1,218.

Despite lower rents in the North compared to the South, a larger percentage of tenants in the North East are borrowing higher amounts exceeding £1,500.

In this region, the average let-agreed rent is £947 per month, resulting in an average five-week cash deposit of £1,184, Reposit explained.

Borrowing higher amounts was also prevalent in the West Midlands at £1,078 a month, London at £2,772 a month and the East Midlands at £1,034 a month.

Those borrowing most frequently were between 18 and 34 years old, while those aged between 55 and 64 were the most likely to borrow £1,000 to £1,500-plus, probably due to higher rents.

Reposit’s Ben Grech said that with rents and cash deposits at record highs, tenants are burdening themselves with repayable debt, which only adds to their financial strain, while deposit alternatives can remove this significant expense.

He added: “As the Renters’ Rights Bill edges closer, landlords are becoming more proactive in assessing tenants’ financial stability to mitigate the risk of rent arrears, potential evictions, and disputes.”

‍