How not to lose out to your landlord

With rents rising and legal protection falling by the wayside, it's never been a tougher time to be a tenant. Graham Norwood seeks expert advice

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Has there ever been a tougher time for tenants? They have little chance of a mortgage so cannot even think about buying while two major factors swing the lettings market sharply in financial favour of landlords right now.

Firstly, demand outstrips supply across Britain. The latest survey from the Royal Institution of Chartered Surveyors, issued in May, shows this trend is exacerbated by frustrated would-be buyers unable to raise deposits or secure mortgages – or both.

"A large stock of properties to let rapidly disappeared as demand for rented houses dramatically increased," says Philip Greenaway of Chesterton Humberts in Somerset. In Durham, Stuart Allen of Broadley & Coulson lettings agency says there is a "buoyant market with large numbers of tenants who'd otherwise be first time buyers."

Inevitably rents rise as a result. Landlord yields – the proportion of a rental property's purchase cost recovered in rent each year – are up from 2 per cent in 2008 to between 4.5 per cent and 7 per cent now. Exceptional locations include Havering and Haringey in London with 10 per cent yields, and Greater Manchester on 9 per cent according to Findaproperty.com.

A second blow to tenants comes in the form of the limited protection they enjoy.

The previous government was to have introduced mandatory regulation of lettings and property management agents but the coalition Government's housing minister, Grant Shapps, scrapped the proposal shortly after coming to office.

According to Christopher Hamer, the Property Ombudsman, this leaves tenants "exposed to the rogue element in the lettings sector, particularly in relation to client money protection". His Code of Practice, which offers up to £25,000 compensation for tenants suffering at the hands of unprofessional or unscrupulous lettings agents, has attracted 7,500 agents voluntarily but "this still leaves many operating outside the scheme leaving consumers without access to redress when things go wrong."

In the past 18 months, lettings-related complaints to Hamer's office have risen in number far more steeply than those for buying or selling a home.

Against this context it is hard for tenants to find an ideal home at an affordable price with a good quality landlord. So to get the best deal, what should you do?

SPECIFY YOUR NEEDS

You know your budget, the minimum size you want and the location, but what else?

Do you require parking or nearby public transport? Furnished or unfurnished? Would you share? Bath or shower? Do you cook a lot or entertain? Is storage space critical? Do you need room to work from home? Would a ground floor flat make you nervous? Is privacy especially important?

"You must view every appropriate place in detail to get the best deal. You can only do that if you know what's appropriate to start with. Make a list with 'must haves' and 'nice to haves' and don't compromise," says Graham Lane, who runs his own relocation agency helping people find rental property in London and York.

MASTER YOUR BUDGET

"The cost of renting is more than just paying the rent. Prioritising your spending and refining your budget is a major part of finding the right property," says Mr Lane.

He urges would-be tenants to include the deposit and running costs such as utility bills, council tax, TV licence, phone and broadband. "Check if you pay less via direct debit," he suggests.

Compare property costs on a like-for-like basis. Look at the price per calendar month and ask the agent or landlord for square footage measurements so you can compare how much living space you get for your money.

Remember a budget for furniture and decorations if they fall to you and, mundane though this is, check meter readings when you move in and leave.

USE GOOD SEARCH TOOLS

Local newspaper small ads are almost a thing of the past for prospective renters.

Most renters scour websites such Tepilo.com or Vivastreet.co.uk for private vacancies or property sites like Primelocation.com or Rightmove.co.uk plus individual lettings agencies' sites appropriate to your area.

If you use an agent, do they merely finds tenants (meaning you then deal directly with the landlord once you move in) or do they also manages the place on an owner's behalf (so you have day-to-day dealings with the agency itself).

Ensure any agent you use is in the Property Ombudsman scheme (Tpos.co.uk), National Approved Letting Scheme (Nalscheme.co.uk) and the Association of Residential Lettings Agents (Arla.co.uk). All offer redress if a problem arises.

VIEWING PROPERTIES

"This is your one chance so don't be unduly polite. Look in the loft, check all storage cupboards, make sure taps, radiators and the boiler all work. Even check the pressure on the shower. Open and close windows, look underneath and behind the furniture and turn off the lights to see how much natural light there is," advises Graham Lane.

The consumer advice body Which? advises that you undertake four key checks:

*Exterior – is it in good condition? Do windows or gutters leak?;

*Interior – check all lights, taps, sockets, broadband and wireless internet;

*Neighbours – check with current tenants if relations are good;

*Safety – see gas and electric safety certificates, and smoke alarms.

"If there's a big problem either walk away or, if you really want the place anyway, ask the agent if the landlord will rectify the issue. Don't offer to do it yourself," urges Lane.

DOING THE DEAL

"If the property has been available for some time, or if the landlord's circumstances mean that he needs to do a quick deal, you could be in a bargaining situation. Chat to the landlord, as an idea of personal circumstances can often give you the upper hand," says Sarah McAllister of Stacks Property Search, a buying agency.

Most contracts are "model" short-term tenancies but read through it scrupulously and ask an expert (a seasoned tenant or a lawyer friend) if you have never rented before.

You will have to pay a deposit – usually one to three months' rent – but you can use this to your advantage. "If you're cash rich, having just sold a property for instance, offering the full rent for a six month period in advance can be a good way of negotiating down the price. A large injection of funds can be an attractive proposition for a landlord," says McAllister.

Remember that it can be hard to get your full deposit back, which is why tenancy deposit schemes have sprung up. Get a deposit receipt and study the inventory closely. After moving in, let the agent or landlord know of any faults with equipment or decoration, so you are not retrospectively charged via a later deposit deduction.