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'Lettings property industry's Wild West'
8:50am Friday 23rd November 2012 in Business Daily
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 highlights what it describes as 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.
Despite the fact 92 per cent of tenants said they were satisfied with their lettings agent, it expalined, two-thirds of those surveyed in key areas across England said they did not receive an inventory when moving into a property, demonstrating “worryingly low standards” expected by tenants.
That “clear lack of awareness or apathy 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, says the RICS, suggest renters have come to expect that level of service.
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 that, 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 agents legal requirements.
In addition, there is a “clear demand for regulation” among consumers, with 87 per cent of renters supporting a single compulsory regulation scheme for all letting agents.
Other findings from the report include:
- 89 per cent of voters agree it should be compulsory for agents to register with a regulatory body
- 93 per cent 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 per cent)
- Greater consumer understanding of the process involved in renting property (83 per cent)
- Improved levels of trust between the letting agent and renter (80 per cent)
- An overall improvement in the level of service provided by letting agents (84 per cent)
Richard Franklin, partner at Edward Gallimore and RICS spokesman, said: “Potential tenants should seek assurance that the agency they are dealing with is properly regulated, as there has been a plague of unregulated agencies popping up in recent times, especially in the larger urban areas of the West Midlands.
“Many of the staff have little, if any, experience in the sector and tenants are asked to part with registration and a hoard of other dubious fees.
“Thorough research into the letting agent is time well spent. See how long they have been in business, look for the RICS or other recognised body to ensure your consumer rights are protected.
“Until action is taken to introduce mandatory regulation to the sector, the lack of a hat is no guarantee you won’t be dealing with a cowboy.”
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