Private landlords are falling victim to unscrupulous letting agents who are corrupt or badly run their businesses, according to research by the surveyor trade body.
The Royal Institution of Chartered Surveyors (RICS) has spoken out against ‘corrupt’ letting agents who are allowed to take advantage of consumers because of lack of regulation in the market.
RICS explains letting agents can open a business that handles thousands of pounds in cash without any qualifications, client money safeguards or need to register with any regulator.
Some of these businesses close without warning, leaving private landlords and tenants chasing debts with little chance of recovery.
Only this week, Helen Gregory, of Beechwood Property Portfolio, Matlock, Derbyshire, has pledged to deal with customer complaints after closing her business without warning.
Some landlords claim they could not recover deposits allegedly lodged by the letting agent with The Deposit Protection Service (DPS).
The DPS believes some deposits were never lodged for protection despite tenants claiming they were paid to the letting agent.
RICS found 87% of landlords and tenants back compulsory regulation for letting agents.
Researchers highlighted 92% of tenants are satisfied with their lettings agent, but around 66% did not understand the letting process and had no inventory when moving in, indicating worryingly low standards, said RICS.
Other factors revealed in the report include:
- 89% of landlords and tenants demanded compulsory registration for letting agents
- 93% called for a regulator to enforce a compulsory lettings industry code
Around 80% of private landlords and tenants believe compulsory regulation would:
- Force letting agents to look after rents and deposits (89%)
- Lay down industry standards for letting a private home (83%)
- Engender more trust between letting agent and consumers (80%)
- Improve standards of service to landlords and renters (84%)
“Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges,” said Peter Bolton King, RICS Global Residential Director.
“What we would like to see is the government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable. Until this happens, we recommend that tenants use an lettings agent that is a member of a professional organisation.”
