Trade body figures suggest that the number of complaints being made against letting agents is continuing to rocket – rising 35% in the last 12 months.
Newly-published annual reports by The Property Ombudsman (TPO) and The Property Redress Scheme (PRS) – two of the government-backed redress bodies businesses who rent out residential properties must be members of – show a steep rise in the number of complaints against letting agents.
PRS figures show what it calls a “huge rise” in the number of complaints being received, with the total number of complaints up 61% and the number of complaints relating to client money rising by 41%.
The figures reveal that 11% of complaints related to tenancy deposits – the third highest number.
Tenants whose complaints were upheld received on average £625 in compensation – a rise of 18%.
TPO results meanwhile show an 8% rise in lettings complaints with 25% of complaints relating to deposits. 67% of complaints were upheld by the Ombudsman
32% of the fines the scheme handed out were greater than £1000.
The third government-backed property redress scheme – Ombudsman Services Property – has recently announced plans to leave the sector, describing the property redress scheme as a “broken solution to a broken market”.
Ajay Jagota from zero deposit renting firm Dlighted responded to the figures.
Dlighted uses low cost deposit replacement insurance to protect landlords and letting agents against property damage, legal fees and rent arrears, while allowing tenants to rent deposit free.
He said: “These figures make it clear that if you make your living from renting out property in 2018 you need more protection than deposits provide.
“Renters know their rights, and with the margins squeezed and the regulatory framework becoming more and more complex, landlords and letting agents need to make sure that they can afford to pay out tens of thousands of pounds in compensation if their tenants complain to the regress schemes – especially since two in every three complaints are successful.
“In the same way that a traditional tenancy deposit only protects you against minimal property damage and a single month of unpaid rent, they are also unlikely to help with the legal challenges which are increasingly inevitable in the private rented sector.
“This the second consecutive year of double digit percentage increases complaints about letting agents. Deposit free renting using deposit replacement insurance doesn’t just help you find tenants fast, it protects you from the costs of ever-more-likely possibility of protracted and prohibitively expensive legal battles.”