Renting roulette: the great lettings gamble

The private rental sector accounts for 4.7 million UK households with two thirds (66%) of all private tenancies involving an agent. However, with complaints to the Property Ombudsman increasing by a quarter this year and evidence of bad practice across the market, it is a gamble whether people get a good or bad agent.

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.”

Which? found widespread problems in the lettings market, including:

* Tenants disempowered and dissatisfied: three quarters of tenants (73%) search for a property not the agent, yet lettings agents are ranked second from the bottom in our comparison of markets and one in five tenants told us they are dissatisfied with their agent.

* Unexpected and unfair fees: we found less than a third of tenants said agents (29%) provided information about fees before they asked, 41% of tenants thought upfront fees were unfair and none of the 32 lettings agents we looked at had information on tenant fees on their website.

* Widespread bad practice: we found evidence of agents using aggressive sales tactics, poor customer service, missing appointments and misleading tenants through out-of-date advertisements.

* Tenants and landlords losing money: both tenants and landlords were found to have lost money through agents not passing on rent, unfairly handling holding deposits or failing to put deposits into protection schemes, as they are required by law.

Despite this bad practice, Which? research reveals both tenants and landlords are not conducting checks on lettings agents. Two thirds (62%) of tenants and nearly half (45%) of landlords told them they did not know whether their agent was a member of a professional body.

Which? is calling for increased consumer protection in the lettings market by extending the legal protection for people buying and selling property to those renting. This would mean lettings agents would be covered by the same legislation as estate agents, which would also require them to sign up to an ombudsman scheme. By changing the legislation, the Office of Fair Trading would also have the power to ban lettings agents that break the rules.

It also wants to see increased transparency with lettings agents including fees in the headline price and made clear at the point of sale, in adverts and on websites. Agents should also provide full details of the terms and conditions of the agreement before any upfront fees are paid.