If you use the standard AST letting contract then, by law, you must use an approved Tenancy Deposit Protection scheme to protect the tenants deposit. There are three, full details here: http://www.direct.gov.uk/en/HomeAndCommunity/Privaterenting/Tenancies/DG_189120 These schemes were set up a few years back to provide a simple legal framework to resolve any deposit disputes and again is really VERY EASY to set up without help from agents. Sheesh...all this simple stuff is on google. Just don't use an agent for letting in East Dulwich or listen to their self interest driven bollocks about how hard it all is.