Think tank the Resolution Foundation has called for letting agents to be put on the same legal footing as estate agents.
It wants the Estate Agents Act to include letting agents in its scope, to give the OFT the ability to ban them. It says that such a move would not be controversial, given that the industry itself has called for it.
Vidhya Alekeson, director of research and strategy, said that as things currently stand, the OFT ‘could close you down as an estate agent today and you could open up as a letting agent tomorrow’.
Last year, prior to Shelter’s campaign highlighting letting agents’ fees in England, the Resolution Foundation did its own research.
It contacted 25 letting agents in London, Manchester and Gloucester, including national and local brands, and reported on a huge variation in fees.
It found admin fees ranging from £90 to £375, and said that a major problem was that tenants did not know upfront what fees would be charged.
Writing in the Guardian, Alekeson said: “Industry experts argue that there’s a simple solution. Tenants just need to make sure they only use accredited agents. But with the private rented sector now the second largest tenure in our housing market, it is not clear that self-regulation is enough.
“This is not a government that likes regulation – quite the opposite. But there is a case for putting letting agents on the same footing as estate agents to reflect the housing market we now have.”
Tightening the Estate Agents Act to include letting agents would mean that all letting agents would have to offer a redress service through an ombudsman scheme.
The Resolution Foundation is also calling for all letting agents to publish their fees, and in a comparable form.
Comments
And while iam on the horse...
I cant believe all letting agents arent audited yearly.
It seems that every week some dodgy agent runs off with peoples deposits.
Where there is temptation there is crime.
Lettings is probably 100x harder then selling houses. it is literally life or death (gas checks) and no one is governing us...scary.
Theses bad letting agetns are also giving the whole industry a bad name..so audits for all,,sorry its the only way. An arla exam cant guarantee you wont pay the advertising bill with a deposit here and there, so what is the alternantive?
sue u r right but we dont live in tubby land where everything should be free.
people want professionals but they want it foir free??
got any ideas how this works in the real world?
I agree that ARLA are useless as are all the other so-called regulatory bodies.
Landlords and lettings agents have had long enough to sort themselves out and it's obvious it's not going to happen without outside intervention.
There is certainly a lot of bias within the responses above! To address some of the comments made:
Tenants are more than capable of asking what fees are going to be charged. It's the response they get that isn't clear.
One local lettings agency in the North West charges £250 for one applicant, £300 for two applicants for "admin" expenses - rent of £695 pcm.
Firstly, that sort of money is not inconsequential for someone looking to pay that level of rent.
Secondly, when challenged as to what "admin" services were actually carried out to warrant this charge, there was a lot of muttering and the words tenancy agreement were finally uttered.
"Oh, so you sit down with the tenant and go through a draft agreement and arrive at a document that contains mutually agreeable terms and conditions then?"
No such thing!! A generic tenancy agreement tenants have to agree to or their application will not be considered. So why are they charging so much?
If tenants want to rent the property in question, and it is with a sole agency, then they have no alternative but to pay whatever fees are requested and keep their mouths shut or their application won't be considered.
Are you think that is a fair way to do business???
ARLA?
Useless!
They should prioritise their support of the Members by issuing positive statements like confetti, everywhere.
The lettings (and agency) industry is being 'got at' by all and sundry, mostly by organisations with no idea of the business and with a biased axe to grind.
In my view their membersip will plumet in January unless ARLA's voice is loudly heard NOW!
And what happened to "buyer beware"? Do they think prospective tenants are incapable of asking about fees?
Shelter seem to think the PRS is another branch of social housing, and their successful campaign on fees in Scotland has succeeded in branding all agents as scum.
OFT, Shelter and the Guardian. That isn't a biased report is it?
Another bit of madness! fees of £375 on a tenancy that is £30,000 per week it is less than nothing to some tenants! Both Manchester and London have football teams that regularly rent properties for their staff and simply do not care what the fees are.
My question is how does someone in the industry get to sit on one of these think tanks! One can contact the OFT , DCLG and HMRC and they simply ignore any attempts to help or advise them, it truely is shocking.
Vidhya Alekeson contacted 25 Agents! that is about 0.35% of lettings agents, how on earth is that not negligent?
Shelter can't do statistics and just make stuff up to suit there own ends. OFT do half a mornings work and call it a report and all the time ARLA just sit there saying nothing! Please stand up for our industry Mr Potter! (that is your job)