By Daniel Hunter
A complete lack of effective regulation has allowed the lettings sector to become the property industry’s 'Wild West', putting consumers at risk, according to the Royal Institution of Chartered Surveyors (RICS).
RICS’ consumer letting survey (conducted in key marginal constituencies), published today (Thursday), highlights the potential for rogue lettings agents to cash in on the current rental boom due to a combination of consumers’ low expectations and a total lack of effective regulation.
It is currently possible for anyone to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process. In addition, it is not compulsory for agents to conform to any code of conduct, provide safeguards or register with a government-approved redress system.
Despite this, four out of five renters believe lettings agents are required to abide by a government, ombudsman or regulatory body code of practice — demonstrating a lack of accessible information on lettings agent’s legal requirements. In addition, there is a clear demand for regulation amongst consumers, with 87% of renters supporting a single compulsory regulation scheme for all letting agents.
Despite the fact 92% of tenants said they were satisfied with their lettings agent, two thirds of those surveyed in key areas across England said they did not receive an inventory when moving into a property, demonstrating the worryingly low standards expected by tenants.
This clear lack of awareness from tenants on what they should expect from their agent is compounded by a lack of effective regulation which can lead to potential consumer detriment, with renters sometimes being charged extortionate fees or given unfair terms. The results of the survey suggest renters have come to expect this level of service.
Other findings from the report include:
- 89% of voters agree it should be compulsory for agents to register with a regulatory body
- 93% support lettings agents being required to meet an industry code of practice.
- Three quarters of tenants think it is the lettings agent, rather than the company they work for, that is responsible for the agent’s actions.
- At least four out of five renters think that if compulsory regulation were to be introduced there would be:
- Better protection for tenants regarding unethical and unfair practices (89%)
- Greater consumer understanding of the process involved in renting property (83%)
- Levels of trust between the letting agent and renter would improve (80%)
- An overall improvement in the level of service provided by letting agents (84%)
"A good lettings agent can be worth their weight in gold for both landlord and tenant," Peter Bolton King, RICS Global Residential Director, said.
"However, there are too many corrupt agents that do not belong to any professional body who are taking advantage of the current gap in regulation, putting consumers at risk.
"Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges. 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, such as RICS."
Join us on