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Massive Increase in Complaints Against Letting Agents

February 27, 2013 | Landlord News   Uncategorized  

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The Property Ombudsman, the UK’s main property watchdog, received more than 8,000 complaints about letting agents in 2012. This represents a 123% rise since 2008. Making up 53% of all property complaints, complaints against letting agents now make up the largest part of The Property Ombudsman’s workload, increasing in conjunction with the massive growth of the private rented sector. There are currently 9,748 lettings offices signed up to The Property Ombudsman. Over a thousand new letting agents joined last year alone.

As many as a quarter of these complaints cannot be investigated because they relate to letting agents who refuse to sign up to self-regulation. Such letting agents are estimated to make up 40% of all agents. Christopher Hamer, ombudsman at The Property Ombudsman, said, “The big issue is that 40 per cent of letting agents that operate in the UK are not a member of any redress scheme. They are operating on their own interpretation of what is good service.”

In 2012, The Property Ombudsman received a total of 15,782 complaints. This was a 12% increase from 2011, which saw 14,066 complaints received. This 12% increase in initial complaints was compounded by a 39% increase in the number of cases referred for formal review or easy resolution.

Individual lettings enquiries increased by 9%, to 8,334, in which consumers raised 14,017 different issues. The biggest issue of complaint was poor service (54%), while issues about letting agents fees and charges were raised in12% of enquiries. Of the complaints that went on to be investigated, exactly half concerned the issue of poor service, whilst the percentage of fee and charges issues went up to 20%.

Out of over 8,000 complaints against lettings agents, 934 proceeded to formal review, an increase of 166 from the previous year. Landlords complaints accounted for 399, whereas tenants were responsible for 330. Third parties were responsible for 9 of the complaints that went to review. Altogether, the Ombudsman supported 73.8% of complaints made against letting agents. Together, London and the South-East were the source of over half of the complaints that went to review, making up 25% and 26% respectively.

As a result of these statistics, The Property Ombudsman will be reiterating their call for some form of regulation for letting agents. Mr Hamer argues that all letting agents should at the very least be required by law to join the Ombudsman scheme. Although around 60% of letting agents in the UK have voluntarily registered for TPO or trade organisations such as ARLA and RICS and follow strict codes of practice, Mr Hamer believes that unless legislation is amended to require all letting agents to follow a set of common standards and offer their consumers a route to free redress, landlords and tenants will continue to be vulnerable, exposed to the risk of unregulated letting agents who may be run by people out to make a quick buck from a booming industry.

He said, “The Government has made clear that it is looking to reduce the burden on businesses and has introduced its ‘Red Tape Challenge’ to de-clutter the statute books of unnecessary legislation. The Government also wishes to avoid imposing burdensome regulation on business, preferring instead that business sectors put their own houses in order.

“However, those organisations involved in the property sector, including those with a consumer advocacy role, want some form of regulation to happen but realistically legislation is the only vehicle that can bring 100 per cent of letting agents within the fold.

“Pressure for change is increasing with amendments to the Estate Agents Act 1979 (EAA) being put forward in Parliament on a number of occasions and I would caution the Government that this is an issue which simply cannot be put off any longer.”

Regarding Baroness Hayter’s regulation proposal that was submitted last month in the House of Lords, the Department for Communities and Local Government has said, “The government is aware of interest in the House of Lords on the subject of letting agents, as part of the consideration of the enterprise and regulatory reform bill. We will consider any developments.”

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