UK letting agents hold over £2.7 billion of landlord and tenants’ money but, according to new research from YouGov, undertaken for SAFEagent, 61% of renters incorrectly believe that money is protected by law.
SAFEagent is warning consumers that their finances are at risk if their letting agent does not have client money protection (CMP) in place. CMP protects money held by an agent (i.e. rent and tenancy deposits), meaning tenants and landlords can recover their funds if an agent steals the cash or uses it fraudulently.
Despite the sums involved, many consumers still remain in the dark about the importance of CMP, with the research revealing that only 25% of renters had heard of client money protection schemes.
According to SAFeagent, at the current time at least one in five renters and landlords aren’t protected by CMP, which is why, five years after SAFEagent’s consumer protection campaign launched, SAFEagent Awareness Week (6-10 June) is calling on consumers to check their money is safe and protected by using a letting agent who is a member of a CMP scheme.
SAFEagent is campaigning for full and mandatory CMP – which protects landlords and tenants from the worst practices in letting agency. Although mandatory CMP is now finally on the government’s agenda with amendments to the Housing and Planning Act, many consumers are still at risk.
John Midgley, chair of the SAFEagent Steering Group, says: “If an agent were to steal landlord or tenant money without CMP in place there’s little chance of getting their money back.
“Would you use a travel agency who isn’t ABTA protected? Consumers who use agents without CMP in place are taking a massive risk. Who can afford to lose thousands of pounds?
“While we are finally getting closer to mandatory CMP, we aren’t there yet. It is so important that tenants and landlords understand that the right to redress only goes so far, and they need to choose their agent wisely by asking if they are part of a CMP scheme before signing on the dotted line.”