Ombudsman Christopher Hamer today called for a crackdown on letting agents. He says that whichever party wins the election, the next government must legislate to improve protection for landlords and tenants.
In his latest annual report, published this morning, he notes a fall in the number of complaints against estate agents but a rise in those against letting agents.
The large majority of initial complaints last year did not translate into investigations. Of 11,165 initial inquiries, there were 891 cases – 456 (51%) against sales agents and 435 (49%) against letting agents.
The Ombudsman says that in both sales and lettings cases, 65% of complaints were upheld.
Twelve of the lettings cases and two of the sales cases were referred by the Ombudsman to his independent council, the Disciplinary Standards Committee, for non-payment of awards made against them. Two lettings agents were expelled, with two other lettings cases still under deliberation.
In 2008, lettings accounted for only 28% of the Ombudsman’s workload, with 300 cases. That same year, there were 799 investigations into complaints against estate agents. This year, Hamer says that complaints against letting agents are set to soar to two-thirds of cases.
He said it was an alarming inconsistency that letting agents are not covered by the Consumers, Estate Agents and Redress Act, which has forced all residential sales agents to join an approved redress scheme.
“To my mind this needs addressing swiftly,” he said. “In the meantime, my message to any landlord or prospective tenant is to ensure that they use an agent who is a member of a recognised trade association or any agent who is a member of The Property Ombudsman scheme.”
Currently, there are 2,241 lettings companies with 7,200 offices who belong to the Ombudsman scheme. The size of the industry is unknown.
Overall, the Ombudsman’s workload fell 15% last year because of the reduction in the number of complaints against sales agents.
Hamer said this was due to the slow sales market and that agents should not rest on their laurels: “I believe from the cases I see that sales agents are causing less need for sellers and buyers to refer to my office.” But he said most complaints were to do with misunderstanding or lack of communication, rather than a specific failing by the agent.
Ian Potter, operations manager at ARLA, backed the Ombudsman’s calls for regulation.
He said: “Consumer protection is of paramount of importance to the Private Rented Sector. For too long, the reputation of an entire industry has been affected by the bad practice of a few letting agents.
“The introduction of the ARLA licensing scheme for letting agents in 2009 has been fundamental to its goal of ongoing sector self-assessment and improvement. Since the scheme was introduced for member agents, thousands have signed up and the Government has recognised our efforts.
“However, the rise in consumer complaints is commensurate to the increase in lettings activity and provides even more grounds for a Government-backed scheme for the better control of all letting agents. Until the Government acts, we therefore urge all consumers to use an agent who belongs to a professional body and to ensure that their landlords also do so.”
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Comments
one of my coleauges called the ombadsman on thursday asking some fairly straight forward questions......the young lady who answered the phone was not able to answer them and she asked her coleauge again not able to answer!! dose not give you much confidence!!!
Mr Hamer,
From a personal perspective, can I just preface this by saying how refreshing it is that you are prepared to engage in this ‘forum’. If only there were others, in far less onerous positions, that were prepared to do so.
On the matter in question, my understanding is that the remit of Dr Mike Biles, as the Housing Ombudsman (Statutory – reporting to Parliament through the Secretary of State), is limited to “registered housing providers, including housing associations and other landlords, managers, and agents”, which perversely does not include Local Authority Housing, which most people would think was “public housing”. That is dealt with by yet another Ombudsman, The Local Government Ombudsman, apparently appointed by Her Majesty the Queen. Ombudsman for Ombudsman seems like a cracking idea, but who would they report to ...... no, don’t go there:)
Is there no end to the regulation, lets face it we live in a complain culture, the only reason complaints against lettings agents has gone up is because tenants and landlords think they might get something for nothing, the TDS scheme is fundamentally flawed as tenants pay nothing to lodge a complaint and landlords/agents are charged, we have experienced tenants referring a complaint to the TDS over a dispute of £25 without even letting the landlord/ agent know. Last year we had 16 referrals out of 1725 tenancies our membership has gone up by 1500% !! for the record the landlord/agent "won" in 11 of the cases yet we still have to pay its total madness. I am hoping a change of government will decrease the amount of pointless regulation, not increase it.
I would like to know how many of the complaints that were upheld by the ombudsman were for less than £200 on the sales side. I would hazard a guess that this would be the majority and that if those same cases had gone to court, the court would have found solely on the side of the agent. My question would then be that it may be worth letting complainants take you to court rather than going to the OEA if the argument they are making is at best tenuous, or worse, that they are just trying to not pay your bill.
Is this not the same 'character' that believes agents are responsible for the accuracy of the PIQ. Why not blame us for the national debt as well? Why don't these parasites STFU and refer complainants to a solicitor? That's what the law is for.
Is it really worth being in this business any more?
Or even being in this country!
Oh yeah more regulation Mr Hamer, that's just what this industry needs! I'm so very pleased for you, that you and your colleagues can have a job with guaranteed salary and leach of we wealth creators, but for goodness sake stop taking the mickey by trying to increase your role.
Actually Roz you have mis1quoted me - my report says "I do believe from the cases I see..". Laurie, the Housing Ombudsman is indeed Statutory but only has a remit in respect of public sector housing.
there should be an ombudsman for ombudsman as well.
Rich, I don't want to sound patronising but that is an excellent point. If there is to be an Ombudsman for the rented sector, it should be for the entire PRS embracing Landlord & Agents, and not limited to the members of Trade Associations who all have their own vested interests and commercial agenda's. There really ought to be a Statutory Ombudsman for Housing covering the whole PRS sector. Curiously, in theory there is, but for some reason, he has been prevented from fulfilling that role.
Before they start picking on agents why not private landlords? No epc's, gas or electric tests?? Makes a mockery out of regualtion..just typical propaganda to get more money by ombudsman..they dont seem to care that putting out this bullshit affects our industry in such a negative way.
If you want to see how NOT to report a story (and why you read EAT!), pop across to The Negotiator web site and prepare yourself for "A whopping 79% of landlords have complained about their lettings agents..." Not something that the Ombudsman report actually suggests nor something that raises the debate. A case of "Never let the truth get in the way of a good story"?
I think you may be right, ace. The cost of participation in the scheme is calculated on a similar basis to the discredited TDS Ltd charging model i.e. per office, though split between 'disciplines'. So, given this self publicity is all about lettings, where the number of properties under management is known with some accuracy, whether you have 100 or 1000 you still pay £120 + VAT. Also TPO income has reduced this year - why? As you say, a good time to increase the fees, particularly for the unregulated lettings people.
Sounds like Mr Hamer will be putting up his subscriptions soon!!.