Fri Feb 07 17:11:43 UTC 2025: ## Bengaluru’s Soaring Rental Deposits Push Tenants Towards Deposit-Free Schemes

**Bengaluru, India** – The soaring cost of renting in Bengaluru is forcing tenants to explore alternative options, as exorbitant deposits are becoming a major barrier to securing accommodation. A recent surge in rental prices—up 20-30% in the last two years—combined with security deposits demanding 6-10 months’ rent upfront, is leaving many struggling. For a 1BHK in prime areas like HSR Layout and Koramangala, monthly rent can reach ₹40,000, with deposits exceeding ₹4.8 lakh.

This situation is particularly challenging for new employees relocating to the city. Real estate professionals like Kiran Kumar, vice president of Hanu Reddy Realty, confirm the difficulty tenants face in securing apartments due to landlords’ unwillingness to negotiate on these high deposits. While inventory is available, the associated costs remain a significant hurdle.

A potential solution gaining traction is the deposit-free rental scheme. This model, offered by companies like NoBroker.com, replaces the hefty upfront deposit with a yearly premium (approximately 6% of the deposit amount). The premium covers unpaid rent, utilities, breach of contract, and property damage, offering protection to both landlord and tenant. Amit Kumar Agarwal, CEO and co-founder of NoBroker.com, highlights that this approach eliminates the substantial upfront cost for tenants while ensuring landlords are protected through a third-party bond.

According to a NoBroker survey, 35% of tenants are interested in deposit-free rentals, and the sector has seen a 400% year-over-year growth. While adoption is increasing, particularly among Gen Z and millennials, challenges remain. Local brokers report a lack of companies offering such schemes, and many landlords, especially those less tech-savvy, express concerns about the insurance process and potential delays in receiving compensation. Despite these obstacles, the high deposit amounts in Bengaluru are fueling the demand for deposit-free options, suggesting the model may gain wider acceptance in the future. Experts suggest that a seamless claims process and increased landlord willingness are key to the wider adoption of this new rental model.

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