Saturday, 24 November 2012

Letting Agents - Raising the issue in Parliament

Back in November I raised the issue of letting agents who rip off tenants on the floor of the House of Commons;
Graham Jones (Hyndburn, Labour)
In a recent survey, one in four tenants reported that they had been ripped off by letting agents. Do the Government recognise that and, if so, what are they going to do about it?

Minister - Don Foster (Bath, Liberal Democrat)
I understand the hon. Gentleman’s concern. He will be aware, however, that a number of letting agents have come together to form the safe agent scheme. We urge all people using such agencies to look out for that scheme, which gives an absolute guarantee that the funds are available to provide the necessary support.
Hansard source (Citation: HC Deb, 12 November 2012, c21 )


Since then I received this corespondence from Sarah in London,
I noticed your recent oral question to Don Foster 'Do the Government recognise that [1 in 4 tenants have been ripped off by letting agents] and, if so, what are they going to do about it?'

The answer you received was that 'a number of letting agents have come together to form the safe agent scheme. We urge all people using such agencies to look out for that scheme, which gives an absolute guarantee that the funds are available to provide the necessary support.'

In case you are not already aware, I thought I would write to point out that this scheme does not offer the protection claimed.

In fact, this scheme is meaningless as it only offers a kite mark which says that the landlord is registered with a scheme which he or she has to be registered with by law in any case.

The website also contains a disclaimer which disclaims any safety the scheme might offer:

"The details contained on this website are made available for information only. Whilst we make every effort to ensure that information is accurate, complete and up to date, we make no representations or warranties of any kind, express or implied, about the information and as such we cannot be held responsible for omissions, errors or inaccuracies, nor for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss of profits resulting from direct or indirect actions based upon the content of this website."

So please continue to challenge the department in this area.

A lot of work is being done by Labour to get to grips with the issue of rogue letting agents. Shelter, whose survey revealed the scale of tenant dissatisfaction are campaigning for better protections. 'Letting Away With It'.

The recent Shelter/YouGov poll round that 1 in 4 people in Great Britain have been charged an unfair fee by a letting agent. Citizens Advice found that that 94% of the letting agents imposed up to seven additional charges on tenants, not counting the tenancy deposit and rent in advance. These can add up to well over £600.



RICS are currently undertaking with industry a review to ensure tenants are better protected and offer further briefing about possible solutions we see to this issue.

RICS estimate that 40% of lettings agents are outside of regulation by the professional/trade bodies.

The believe the current issue is:
  • Lettings agents are not required to meet minimum professional standards in order to start trading and are not subject to any form of licensing regime.
  • This means agents can, for example, charge extortionate and opaque ‘administration’ fees or evict tenants with little or no notice. 
Lettings agents are not required to have a redress mechanism in place for customer complaints.
This means that the tenant has very little protection when things go wrong unless their letting agent is a member of an Ombudsman Scheme as required by Professional/Trade bodies such as RICS and ARLA.

Too many agents are taking advantage of this gap in regulation, putting consumers at risk. The current framework costs business money, hitting the many microbusinesses and sole practitioners in the sector particularly hard. Safe Agent does offer client money protection but RICS is of the view that a single regulatory and redress system for both sales and lettings would better ensure that agents are fully accountable. The sector has changed since 1979 with current regulation perpetuating an artificial distinction between sales and lettings which does not reflect how many businesses are now organised or how consumers interact in the sector.

RICS has commissioned independent consumer research on the issue which found that consumers overwhelming want better regulation.