Valerie Bannister, head of lettings at LSL Property Services, told delegates at the Paragon Great Buy-to-Let Debate 2014 that regulating lettings agents with a mandatory redress scheme would solve problems of code of practice.
She said: “It will deal with the rogue agents, who can lease short term premises, be here from two or three months, do cash transactions and then disappear overnight. They can disappear with rent and security deposits.”
It was claimed that rogue letting agents not only hit consumers, but landlords, who are still required to make payments to HMRC when they encounter rogue agents.
David Whittaker, managing director of Mortgages for Business agreed but was more cautious regarding the cost of potential regulation.
He said: “We just need to make sure the cost of that does not become pernicious because at the end of the day it won’t end up with the business owner, it will pass down to the chain.
“The cost of regulation is always taken by the end product user. The only person who is going to pay for it is the tenant.”
He added that trade association ARLA can only regulate to an extent due to its position as a voluntary body.
John Heron, managing director of Paragon, said: “I think there are too many examples of tenants and landlords being ripped off by rogue agents.
“It’s unfortunate that it hasn’t been able to regulate itself to an extent - I think you should therefore look at the statutory regulation.”
Bannister said she had seen cases of non-regulated tenants charging up to £1,000.
She added: “Agents charges vary across the country, but equally so do the running costs of every business across.”