Tenants get a distinctly second class deal in Britain. No matter how diligent you are about paying rent on time, or how detailed your home contents policy is, or how many years NCD you have, a tenant gets very little credit for that responsible behaviour from the wider world of finance – or indeed landlords.
Canopy (formally known as InsureStreet) is re-engineering the property rental market by making it simpler, more efficient and fairer for renters, landlords and estate agents. Canopy recently received £1.6m in funding from strategic investors including £1.3m from Direct Line Group.
The Canopy service is based around a RentPassportTM, which provides proof of an individual’s rental and credit history and their ability to pay rent promptly. This helps both landlords and agents to pre-approve renters, saving them significant time with the vetting process. It is also a record of trust and credibility for renters.
Because this is a checkable, portable, database which travels with the tenant as they move home, it should also help tenants obtain better deals on home contents cover. The app switches the risk from the property address to the renter, which can only be a good thing for many tenants.
The Canopy service also means that UK renters will no longer need to scrape together a deposit, typically six to eight week’s rent, in order to secure a property. This is replaced by a simple deposit insurance policy, DepositFreeTM, underwritten by HISCOX. DepositFreeTM covers the renter and landlord for everything covered by a traditional cash deposit. Premium range from 5%-15% of a typical security deposit, and is paid by renter.
Canopy has a partnership with leading Credit Reference Agency Experian, which allows renters to strengthen their credit history by paying rent through the app. This could, in the future, significantly expedite renters’ ability to secure a mortgage and become home owners.
Tahir Farooqui, CEO and founder of Canopy, said,
“As rents have risen across the UK, the deposits required to even enter the UK rental market have spiralled out of control. Canopy has both the technology and relationships in place to empower renters and help them to eventually become buyers.”
A security deposit, typically equivalent to six weeks’ rent, is a barrier for many, especially younger people seeking to enter the rental market. With Canopy, renters can keep their hard-earned money and instead buy an insurance policy at the cost of approximately ten per cent of a deposit, which covers the security deposit as well as estate agent and other rental fees.
Jonathan Westley, Managing Director of Consumer Information Services at Experian, commented,
“Securing the property you want – whether rented or owned – is not always as smooth a process as it could be. Experian created the Rental Exchange to level the playing field between tenants and homeowners, so rental payments will help strengthen their credit histories. Now our work with Canopy will help more renters get better access to financial products, including mortgages.”
Founded in 2016, Canopy was created to re-engineer insurance to make life simpler for renters across the UK. The company, which secured initial funding from angel investors including serial entrepreneur Vin Murria, has raised a further £1.6 million from investors including Direct Line Group.
With more than £4 billion of rental security deposits held, Canopy has the ability to help free this up and directly benefit the UK economy in a number of ways.