Politicians, journalists and traffic wardens eat your heart out. A new group of people are making a strong bid to steal your crown as the most hated in the country: letting agents.
A report from Citizens Advice today reveals a litany of abuse, greed and chicanery enough to make even an MP blush. The worst abuses by estate agents were tackled by legislation in 2007 but the government has only just proposed statutory regulation for letting agents (many firms do both) in a green paper last week.
About two-thirds of private lettings are made through agents, who typically charge landlords 15% of the rent for their services and tenants a deposit and rent in advance yet do not have to have any professional qualifications.
But Citizens Advice found that 94% of letting agents impose additional charges on top of that. There are non-returnable holding deposits, deposit administration charges, charges for reference checks, administration fees, charges for check-in inventories and check-out inventories and tenancy renewal fees.
Tenants were paying average extra charges of £200 each. Some agents were charging tenants a modest £25 while others were raking in almost £700. The charge for a reference check ranged from £10 to £275 and for renewing a tenancy from £12 to £220. Less than a third of agents willingly provided full written details of their charges to CAB workers.
While some agents were providing a great service that was appreciated by tenants, others did nothing about repairs and unsafe appliances, refused to respond to complaints and failed to have any money protection arrangements. Tenants reported losing their deposit, their rent, their council tax when agents went bankrupt or simply disappeared.
Bear in mind that it’s not just tenants who are unhappy with agents and the case for statutory regulation is overwhelming. Landlords say agents in London and the South East typically charge them 11% of the annual rent just to renew a tenancy agreement - from their perspective that amounts to money for nothing.
In fairness, trade organisations like the Association of Residential Letting Agents (ARLA) have launched their own bid to clean up the sector and have as much interest as anyone in driving the unscrupulous and unethical out of business.
The crucial question now is the form that statutory regulation will take. The licensing scheme that ARLA launched earlier this month included professional qualifications, client money protection, independent audits, professional indemnity insurance, an independent redress scheme and a strict code of practice.
But Citizens Advice wants regulation to go further: no charges for functions that are part of routine letting and management like checking references and inventories; a requirement to ensure that properties meet basic safety standards; clear standards for getting repairs done speedily; an end to blanket restrictions on housing benefit complaints; an independent regulator with tools to enforce compliance; and a ban on threatening tenants who complain or try to enforce their rights with eviction.
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