The legalities of letting

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Indy Lifestyle Online
Finding a decent small flat is harder nowadays because of the recession and cuts in social housing. Static prices mean less incentive to get a foot on the mortgage ladder before property soars; tenant queues therefore get longer and fewer flats are released by people who would otherwise move on. This week's rise in mortgage interest rates may be an additional incentive to rent rather than buy.

Those who would once have gone into council or housing association property are also competing for private flats. Some landlords prefer dealing with tenants on housing benefit because the rent comes straight from the local authority.

More flats have come on the market as owners rent out rather than sell at depressed prices, but like most lettings nowadays they will be Assured Shorthold Tenancies (ASTs). These were introduced in 1988 to guarantee landlords that they could reclaim their property at the end of a contract. Tenants cannot be thrown out as long as they pay the rent and look after the property.

But ASTs are for a minimum of six months and more often stretch to a year, which is a problem if you want something more temporary. They also require a deposit normally covering the first four to six weeks' rent.

'Landlords need that much to cover the risk of damage or someone skipping off,' says Malcolm Harrison of the Association of Residential Letting Agents (ARLA).

The paperwork has to be carefully done to prevent loopholes, which is why landlords are increasingly using agencies. These now account for around a third of rented property in London.

One alternative for hard-up renters is to share. ASTs apply only to self-contained units. The typical house with a dozen bed-sits and shared kitchens and bathrooms falls outside the rules, so the deposit will be smaller - perhaps a month's rent - and you can leave more quickly. But you may also be overcharged, under-provided and generally ripped off more easily without a contract.

This kind of shared living is usually done through accommodation agencies, which charge you for the privilege. Letting agencies, which generally deal only with self-contained flats, charge the landlord. Make sure they are members of a professional body such as ARLA.

Some accommodation agencies also charge people for address lists, which is illegal. Pay nothing until you have chosen a property and signed an agreement.

A better may be to get a few like-minded people as sharers and sign the dreaded Assured Tenancy. The deposit is easier to manage when split, although a quirk in the law says this is limited to a maximum of four. Individuals can also leave before the term is up and the others then replace them as long as the landlord is informed.

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