Tenants will no longer have to worry about wrongly losing their deposits when they leave a property thanks to a new compulsory money protection scheme for landlords and letting agents.

Tenants will no longer have to worry about wrongly losing their deposits when they leave a property thanks to a new compulsory money protection scheme for landlords and letting agents.

Details have emerged about the tenancy deposit protection scheme, which comes into force in April, as a way of ensuring landlords do not keep back money that should be returned to the tenant.

It comes as a new report on the buy-to-let industry states more than a million households live in such properties with tenancies expected to grow by 20-30,000 a year over the next 10 years.

The Association of Residential Letting Agents (ARLA), marking the 10th anniversary of the buy-to-let industry, stated in the mid 1990s less than half the private rented sector was owned by individuals, but now they own two thirds of the sector.

But new laws coming into effect on April 6 will crack down on unscrupulous landlords and aim to give more rights to the tenant.

The tenancy deposit protection scheme, for example, will give landlords two choices; a custodial scheme and an insurance-backed scheme. Under the custodial scheme, a landlord or letting agent will pay the tenant's deposit into a free scheme run by an independent organisation. At the end of the tenancy, the refund will be awarded by the scheme administrator and any dispute settled by a special resolution service.

Under the insurance-backed scheme, the tenant will pay the deposit to the landlord, who will retain it but inform the scheme administrator of the details. Again, if there is any discrepancy when the tenant leaves, the administrator will rule on how much money is to be returned.

It targets the bad practice by some landlords of keeping a deposit - and gives the tenant more rights to get it back. Currently, the only course of action is to take the landlord to the small claims court.

The scheme has been welcomed by letting agents. Richard Jeffery of Tops Rentals, said: “We are in favour of anything that aims to clean up the industry and some of the more unscrupulous landlords. For us, we do not think it is going to have any impact because we always have a detailed inventory drawn up between the tenant and landlord. As for having to pay for a scheme, it is going to be worth it.”