The Office of Fair Trading (OFT) has published a report which identifies several consumer protection issues in the lettings market and has made a number of recommendations.
As part of this report, the OFT analysed nearly 4,000 complaints made by people renting a home as well as those letting out a property. It found that both tenants and landlords were concerned about fees and charges levied by agents, poor service provided and that ‘surprise’ charges were introduced or ‘drip-fed’ once contracts have been signed.
The report sets out a number of recommendations for Government, industry, enforcers and others in order to make the market work better for tenants. The recommendations and next steps include:
- Better compliance with legislation and in particular better up front information. The OFT would like fees to be set out in a clear tariff of charges.
- A general redress mechanism so landlords and tenants can sort out problems when they occur.
- More consistency within the industry so that common principles are applied throughout the industry, such as what information is used for pre-tenancy checks.
- Government, industry, enforcers and consumer bodies to agree a national strategy.
- Agree an enforcement strategy for traders who do not comply with the law.
- Initiatives which make it easier for landlords and tenants to assess quality, such as recognised logos.
- Working with industry and consumer bodies to develop joint educational material such as ‘quick guides’ to help tenants and landlords understand their rights.
The OFT is hosting a series of events with parties involved in the lettings industry to discuss its findings and recommendations aimed at raising standards within the market.
Cavendish Elithorn, senior director of goods and consumer at the OFT, said: “Our findings shows that tenants and landlords are often dissatisfied with their agents but we also know that most agents want to do the right thing. It’s important that tenants ask for key information, but we also believe that government, industry and enforcers working together can have a real impact and improve overall standards in the lettings market.
“This report sets out our view on what improvements could be made to address concerns with this market and we are keen to play our part in bringing together those involved in the lettings industry to focus efforts where they are most needed.”
Peter Bolton-King, RICS Residential Director, said: “The OFT report adds yet another voice to those calling for changes to the lettings market. However, RICS remain concerned there is still no recommendation for clear, consistent and targeted regulation for all aspects of the UK residential property market. Such an holistic approach is long overdue, since ultimately it is about the provision of shelter, a basic human requirement.
“RICS’ own recently published research – an impact assessment of bringing lettings agents within scope of the Estate Agents Act 1979, and introducing statutory minimum professional standards – shows there is real potential to introduce such clear, targeted regulation without generating burdens on business. In light of this latest OFT report, RICS urges Government to think again, and use the Enterprise and Regulatory Reform Bill to introduce such regulation, in particular, statutory redress for lettings agents.
“In today’s report, the OFT recommend increased transparency in lettings agents’ fees and charges, and working with trading standards to develop an agreed enforcement strategy. These measures are important in creating a level playing field for all residential property professionals and consumers which RICS has long sought.
“As an independent body with a royal charter which requires us to act in the public interest, RICS is ready to help with advice and guidance so consumers are aware of their rights and responsibilities in the lettings market.”