Independent think tank the Resolution Foundation has said that the Estate Agents Act should include letting agents in its scope, which would give the Office of Fair Trade (OFT) the ability to ban them if they step out of line. They do not believe this would be a controversial move as this very opinion has already been expressed within the industry.
With the private rented sector now the second largest tenure in the housing market, they do not believe that self-regulation is enough.
Housing charity Shelter have taken the same view following their own research that found that a quarter of tenants felt that they had been charged unfair fees by a letting agent, believing that they had been charged extortionate fees that were in no way equal to the amount of work done by the agent.
Resolution Foundation carried out similar research the previous year, contacting 25 letting agents in Manchester, London, and Gloucester, including national and local brands. They found that administration fees ranged from £90 to £375, and that one in three charged a tenancy renewal fee while the rest did not.
Vidhya Alakeson, director of research and strategy at Resolution Foundation, has said, “Putting letting agents on an equal footing with estate agents would get rid of the worst parts of the market. At the moment, the OFT could close you down as an estate agent today and you could open up as a letting agent tomorrow. To make the market more transparent for tenants and landlords, so that they know what fees they will incur upfront, agents should be required to be members of an ombudsman service and, as part of membership, to publish their fees in advance and in a comparable form.
“The private rented sector is arguably the Cinderella tenure in the housing market. Now that it has overtaken social housing, it is time to focus on making it work better for people who will make it their home for the medium to long term, not simply pass through. Making letting agents fairer and more transparent is just one part of what needs to be done.”
And this may not turn out to be mere wishful thinking, as the new Minister for Housing, Mark Prisk, is likely to be receptive to such a suggestion, given his history, revealed in this exchange in a Commons debate on private letting agents on 5 September:
Ian Hearns (MP for Gateshead): “Is my Hon. Friend aware that he has an ally in the new Minister for Housing on the regulation of the private sector? In 2007, he tried to introduce a clause into a Bill that would have regulated private letting agents.”
Jack Dromney (shadow Housing Minister): “I agree with my hon. Friend. It is welcome that the new Minister for Housing has taken that position. Perhaps he will follow that through in government.”
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