‘Wild West’ fear for lettings sector

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A clampdown on the lettings sector is needed to stop rogue agents turning it into “the property industry’s Wild West”, the Royal Institution of Chartered Surveyors (RICS) has warned.

RICS said its research highlights the risks of unscrupulous lettings agents cashing in on the rental boom amid “a total lack of effective regulation”.

Two thirds of more than 1,000 people who have rented a home in the last two years in England said they did not receive an inventory when they moved into their property, which RICS said showed the “low standards” some tenants have experienced.

Demand in the rental sector has rocketed as people have been unable to buy their own home, either because they cannot raise the deposit needed or meet lenders’ toughened borrowing criteria in the difficult economy, which has pushed up the cost of renting.

RICS warned that it is currently possible for people to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process and it is not compulsory for them to conform to codes of conduct.

Several calls have been made for better protections for people living in the private rental sector in recent months, with Shelter reporting in September that almost a quarter of people feel they have been “ripped off” at some point by letting agents’ charges.

Around 23 per cent of people surveyed by the housing charity said they had been charged unfairly high fees for aspects of renting such as credit checks, renewing contracts and “administration”.

Shelter said it had found cases of renters being charged more than £150 for repeat credit checks every year, which the charity said actually cost between £8 and £25 to perform.

It said some people were being charged £100 just to view a property and renters were being charged up to £540 in non-refundable “administration” fees.

Peter Bolton King, global residential director for RICS, 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.”

RICS found that while nine out of 10 tenants surveyed said they were satisfied with their lettings agent, there was confusion over agents’ legal requirements, with four out of five renters believing that agents are required to abide by a Government, ombudsman or regulatory body code of practice.