More pressure is being piled on the Government to regulate letting agents and drive out the rogues, following the latest Which? report.
It said that its new study into the lettings market had uncovered bad practice, unexpected and unfair fees, and a lack of protection for both landlords and tenants.
It said people were playing ‘renting roulette’ – gambling as to whether they chose a bad or a good letting agent.
The Which? report follows hard on the heels of the RICS report last week which suggested that the private rented sector was the ‘Wild West’ of the property market, and during an ongoing Shelter campaign letting agents’ fees.
Shelter has already won a campaign in Scotland to have agents’ fees to tenants declared explicitly unlawful. It is now gathering evidence in England.
The RICS report last week said that there were ‘corrupt’ letting agents around. It called for government legislation but said in the absence of that, the public should opt for agents who were members of voluntary regulators.
But the Which? report shows there is very little awareness of bodies such as the RICS, National Approved Letting Scheme (NALS) or Association of Residential Letting Agents (ARLA). Two-thirds of tenants (62%) and nearly half (45%) of landlords did not know whether their agent was a member of a professional body.
Meanwhile, the Government is in the process of conducting its own consultation into the private rented sector. In particular, it is looking at the fees charged by agents, mandatory regulation of both agents and landlords and the introduction of rent controls. See next story.
The Which? report said that out of the 32 agents it specifically looked at, not one had information as to its fees on their website.
It also says that it found evidence of agents using aggressive sales tactics, and misleading tenants through out of date adverts.
Most worryingly, it says that both tenants and landlords have lost money, with agents not passing on rents or failing to protect deposits.
The Which? report, like last week’s RICS paper, is calling on ministers to extend the legislation which currently applies to estate agents to letting agents.
The Property Ombudsman has also repeatedly called for the Estate Agents Act to be amended to include letting agents. This would mean that they would have to offer a redress service, and the Office of Fair Trading would have the power to ban lettings agents, in the same way that they can (although they rarely do) bar estate agents.
The Which? report is also calling for letting agents to be more transparent about the fees they charge, both in adverts and on their websites, and to provide full details of terms and conditions before any upfront fees are paid.
Which? found a wide discrepancy in fees during a mystery shopping exercise. For example, a credit reference check for a single tenant could be anything from £43 to £90, while some agents charged nothing for a check-in fee and others charged £60. Administration fees ranged from £120 to £420 and deposit admin fees ranged from nothing to £29.
The Which? report was based on a survey of 1,006 tenants, plus one of 506 landlords, all of whom had used an agent in the last two years. There were also focus groups, further analysis of Citizens Advice complaints data, and the mystery shopping exercise of 32 agents in Nottingham, London, Birmingham and Leeds.
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Comments
There is a reason Display your worth.
Frankly I would love to display our fees. Unfortunately many agents run their business on the simple premise of undercutting everyone else.
The comment that usually follows my statement above from people not in the business is that we should demonstrate that our service levels justify our fees and we should not resort to tactics such as this which sounds fantastic in theory.
The reality is that many Landlords would compare several websites (most of which will promise virtually the same service) and take those with the best looking fees. The problem being we have not had the opportunity to speak with the individual and fully explain why our fees are justifiably higher.
Many is the time we get a call from someone wanting to know our fee and only our fee. They are not interested in a sales pitch or an appraisal. Once you give it, if it's not competitive that is the last time you hear from them. Quite often they simply hang up which is very pleasant (and no we aren't that expensive)
I don't think the survey can claim to be definitive but regardless of the source, it's quantity or relevance it still shows what we all know is rife in our Industry.
Competing agents will obviously produce a fractured market of fees and services as we all battle to promote ourselves, however the Which report called for transparency and I see no harm in that.
Differing costs are prevalent in commerce but the consumer should be allowed to see what they are, up front. Instead most agents only reveal theirs on a valuation, as though they're ashamed and want to apologise for them in person.
If we're truly not competing on price then lets reveal them!
Dave
Absolutely spot on - using data gathered from 1544 sources just 32 of them were agents in only 4 cities.
Let us all just hope and pray that this report is not taken as seriously and ends up delivering the same as Unsafe Deposits did in 1998
Most agents have their fees on their website or are upfront with customers before any paperwork is signed, its all about the public making an informed choice, You wouldnt eat at a restaurant whose menu had no prices, but yet again its the not so professional agents that muddy the water for the rest of us.
Stop trying to squeeze money out of good agents and start hitting the rogues.
Public education is the key here as most people havent got a clue about Deposit protection or anything else, it is too easy to fleece the public while they are so unaware.
all the so called regulating bodies out there should get together and form 1 body, educate the masses and stop the bad apples from trading.
it isnt rocket science but instead they would rather issue statements and 'talk' about what can be done...
Just get on with doing it.....
i know for sure that my company was not built on thoughts and dreams alone, it was built on doing
32 Agents... Out of how many in the UK?
How many more 'experts' are going to tell you how to conduct your business?
The EA Act has prevented - what? If one is a crook it does very little because they are just that!.
RICS have a vested interest and have always wanted exclusive control of all aspects of the property market.
WHICH should concentrate on making 'comparisons' between domestic products and keep their nose out of things they know very little about.
yawn yawn yawn.. now find me an organisation to attack the dreaded consumer who - even after signing a breakdown and explanation of fees and charges - has the cheek to call up right before a move and declare my fees unfair and unjustified.
This of course after we've done all the work...