The new Financial Services Authority proposals announced last week provide support for borrowers, but what about tenants?

Renters are equally at risk of over-stretching themselves financially, according to payment protection provider, British Insurance, but are far less likely to get help.

While the FSAs proposals for lenders to better assess borrowers ability to repay mortgages is a welcome move, the PPI provider is concerned that tenants are overlooked when it comes to advice for dealing with the tough rental market.

As a tenant needing to find a new place next month but faced with incredibly slim-pickings and high rents in my area, I couldn't agree more.

There were 3.1 million private rental households in 2008/2009, up from 2.7million in 2007, according to the Government's English Housing Survey. Private renters and those in socially rented housing now account for 32% of UK households and this is set to increase as demand for properties continues to outstrip supply.

Estate agents across the country are reporting that they have more tenants than properties available, and figures from Credit Action show those than do manage to find a home are struggling financially. The debt charity predicts that for every day in July, some 363 landlord possession claims and 238 landlord possession orders will be made.

Nel Mooy, managing director of British Insurance said: "Last year the Council of Mortgage Lenders advised that people who rent are more susceptible to debt than those with mortgages. Its rationale was that borrowers who succumb to financial difficulties have access to draw-down facilities, can refinance, borrow more or sell their property. Renters have none of these options."

So what do renters need to consider before signing a tenancy agreement?

Don't pay over the odds Visit lettings agents and research the local market to find out what kind of rents you are dealing with. Are you tied to a certain area for work or can you look further afield where rent may be cheaper? If this is an option, weigh up related commuting costs such as train fare or petrol.

Financial audit Before you start viewings and get attached to a certain property, work out how much you can realistically afford to pay. Based on your net income, take into account essential outgoings such as utilities, council tax and groceries.

Build up a deposit Landlords usually require a deposit equal to between four and six weeks rent, so save for this first and ensure it's paid into a Tenancy Deposit Protection Scheme.

Rent payment Agree a set date for rent each month to help with budgeting and ask for a rent book or receipts to record your payments. Clarify whether the total rent for the property is single or joint liability if you live with housemates to ensure you are not held responsible if someone else struggles to pay.

Rent arrears Ask what procedures are in place to deal with rent arrears. Request in writing details of the alternatives to repossession and find out who to turn to if you do fall behind with payments.

Your landlord should be the first port of cal,l and then organisations such as Housing Advice Centres, Citizens Advice Bureau, Shelter and National Debtline. If you do get into financial difficulties, it's worth checking whether eligibility for any housing and council tax benefits, or tax credits.

Scrutinise the Tenancy Agreement Do not sign your contract until you fully understand all the terms. Ensure the deposit and what it covers is fully documented, as well as the conditions for getting it back when you leave. British Insurance also advises to look out in the terms for notification of rental increase, and to confirm important issues in writing and keep a copy.

Legal obligations It is mandatory for landlords to provide a Tenancy Agreement, Tenancy Deposit Protection and an Energy Performance Certificate. The property must also adhere to gas, electrical and fire safety standards.

Inventories An up to date inventory is crucial so you and the landlord are in agreement of the state of the property and everything in it at the tenancy start date. For extra security, take photos of anything that is damaged at the start so you can't be held responsible when you leave.

Insurance As a tenant it is your responsibility to protect your possessions with contents insurance. British Insurance warns never buy cover from your landlord – it's illegal unless they have approval from the Financial Services Authority.

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