Our new research into the lettings market reveals bad practice, unexpected fees and a lack of protection that fails both landlords and tenants. Is renting through a letting agent too much of a gamble?
The private rental sector has grown rapidly over the last 20 years, and now accounts for 4.7m UK households. And two thirds of all private tenancies involve an agent.
Letting agents hold a powerful position within the rental market. From the landlord’s perspective, agents manage a valuable asset; their property. From the tenant’s perspective, agents play an important role in determining the experience of their home.
And yet, anyone can become a letting agent without any qualifications or specific rules about how they handle client money. Only 60% of agents are signed up to a professional body and redress scheme, which makes choosing the right agent a key decision.
Letting agents’ bad practice
However, we’ve found that there’s fairly wide scale poor practice when it comes to letting agents, resulting in both landlords and tenants being vulnerable. The poor practice we uncovered included:
- Tenants disempowered and dissatisfied: letting agents are ranked second from the bottom in our comparison of markets.
- Unexpected and unfair fees: we found less than a third of tenants said agents provided information about fees before they asked, and none of the 32 letting agents we looked at had info about tenant fees on their website.
- Widespread bad practice: we found evidence of agents using aggressive sales tactics, poor customer service, missing appointments and misleading tenants through out-of-date ads.
- Tenants and landlords losing money: both tenants and landlords were found to have lost money – sometimes thousands of pounds – through agents not passing on rent or unfairly handling deposits.
Despite all of this, tenants and landlords aren’t conducting checks on letting agents. Two thirds of tenants and nearly half of landlords told us they didn’t know whether their agent was signed up to a professional body.
So, we think there needs to be more protection in the lettings market, giving renters the same legal protections as people buying and selling property. That would mean letting agents would have to sign up to an ombudsman scheme and could be banned by the Office of Fair Trading if they break the rules.
And then there are the letting agent fees – these need to be much more transparent. All fees should be included in the headline price and also made clear at the point of sale. Isn’t it about time more was done to protect both tenants and landlords from rogue letting agents?