Tuesday, 27 November 2012

Which? report claims tenants are being hit by unfair charges

A new report from consumer group Which? claims that tenants are being hit by unfair charges. Their report states:

New research by Which? has found that rental tenants feel disempowered and dissatisfied with their letting agents. Which? found that lettings agents are ranked second from the bottom in their comparison of markets.

Tenants hit by unexpected charges from letting agents

Unfair fees are another area of consumer detriment that Which? uncovered. Less than a third of tenants said that agents provided information about fees before they asked, which hints at a lack of transparency in the industry.

Which? also found that of the 32 lettings agents we looked at, none provided fee information on their websites.
Which? found that 41% of tenants think that upfront fees on rentals are unfair. Holding deposits cost an average of £400 (or one week's rent), deposits cost £1,000 (one month's rent plus six weeks' rent) and deposit administration fees cost up to £29.

And that's without the credit reference check, which can cost almost £100, and the administration fee – which can be as much as £420. Some 64% of consumers reported having to pay administration fees, while three-quarters told us they had to pay deposits when taking out a rental contract. Almost half (47%) said they had to fork out for a holding deposit.
Bad practice in the lettings market

Complaints to the Property Ombudsman have increased by a quarter this year. Which? found evidence of aggressive sales tactics, poor customer service and – shockingly – misleading consumers through out-of-date advertising.
Tenants aren't the only ones affected. Landlords were also found to have lost money because agents fail to pass on rent or unfairly handle holding deposits, and we also found that some letting agents fail to put deposits into protection schemes – something that is required by law.

Which? wants action taken on letting agents
Two-thirds of all private tenancies involve an agent, so this isn't a small problem. If you're planning on renting a property, always make sure the agent is a member of a professional body. We found that 62% of tenants and nearly half of landlords (45%) didn’t conduct a check on their letting agent.

Which? is also working on changing this bad practice. We are calling for increased consumer protection in the rental sector by extending the legal protection for people buying and selling rental properties.
This would ensure that lettings agents are covered by the same legislation as estate agents, making them more tightly regulated and giving the Office of Fair Trading the power to ban agents who break the rules. It would also require them to sign up to an ombudsman scheme.

'Greater transparency' from letting agents
Which? also want to see more transparency from lettings agents. This means fees being included in upfront quotes, in adverts and on websites. We also want terms and conditions to be provided in full.

Which? executive director Richard Lloyd says: ‘People searching for a rented home through a lettings agent are too often hit by unexpected fees or an unacceptably bad service. With the private rented sector now the only option for millions of people, it is vital that more is done to protect both tenants and landlords.’

Click here to read the Which? report Renting roulette: the great lettings agent gamble

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