A complete lack of effective regulation has allowed the lettings sector to become the property industry’s Wild West, putting consumers at risk.
The accusation comes from the RICS, which is stepping up its campaign for the statutory regulation of agents.
In an unusually strong statement, the RICS said too many letting agents are corrupt.
The RICS lettings survey, published today, highlights the potential for rogue lettings agents to cash in on the current rental boom, taking advantage of consumers’ ignorance.
Although 92% of tenants said they were satisfied with their lettings agent, two-thirds said they did not receive an inventory when moving in to a property.
The RICS said this clear lack of awareness – or apathy – from tenants as to 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.
The RICS noted that it is currently possible for anyone to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process. Nor is it 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 tenants believe lettings agents are required to abide by a government, ombudsman or regulatory body code of practice.
Yet there is a clear demand for regulation amongst consumers. The RICS survey shows that 93% of tenants believe letting agents should have to meet an industry code of practice, with 89% believing it should be compulsory for agents to belong to a regulatory body. In total, 87% of tenants supporting a single compulsory regulation scheme for all letting agents.
Peter Bolton King, RICS global residential director, said: “A good lettings agent can be worth their weight in gold for both landlord and tenant.
“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 a lettings agent that is a member of a professional organisation such as RICS.”
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