Consumer watchdog Which? has called for all letting agents to be governed by the same laws as estate agents, with the OFT having the power to ban them.
In a damning report, Which? said consumers were ‘gambling’ whenever they had to choose a letting agent.
It said it had uncovered bad practice, unexpected and unfair fees, and a lack of consumer protection that fails both landlords and tenants.
Which? said it found ‘widespread problems’ in the market, including aggressive sales tactics and poor customer service. It said that of 32 letting agents it had looked at, not one displayed tenant fees on its website.
Which? also said that both tenants and landlords were found to have lost money through agents not passing on rent, unfairly handling deposits or failing to protect deposits.
The Which? report follows hot on the heels of one from the RICS, which last week likened the private rental sector to the Wild West – full of cowboys. The RICS, like Which?, has also called for the mandatory regulation of letting agents.
The Which? study was based on a survey of 1,006 tenants who had rented through an agent in the last two years, and 506 landlords who had used an agent. It also did a mystery shopping exercise of 32 agents in Nottingham, London, Birmingham and Leeds.
The Department for Communities and Local Government is currently inquiring into the private rental sector. On its agenda is the question of licensing both letting agents and private landlords, and whether rent controls should be implemented.
The Which? report also follows the successful campaign by Shelter in Scotland that has resulted in the explicit legal ban on all tenancy fees. Shelter is currently collecting evidence on fees in England.
The RICS in its ‘Wild West’ report said that in the absence of statutory regulation, consumers should check that their letting agent belongs to a voluntary scheme. But the Which? report said that two-thirds (62%) of tenants and nearly half (45%) of landlords did not know whether their letting agent belonged to a professional body.
Which? executive director Richard Lloyd said: “People searching for a rented home through a lettings agent are too often hit by unexpected and unfair fees or 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 from rogue lettings agents.”
More on this story on our sister site tomorrow at Letting Agent Today.