Complaints against agents - what are the biggest concerns?
They may not be positive, but consumer complaints provide a useful way for letting agents to monitor success and customer satisfaction levels.
Since October 2014, all letting agents have been legally required to be a member of one of three government-approved redress schemes - The Property Ombudsman (TPO), The Property Redress Scheme (The PRS) or Ombudsman Services: Property.
These schemes give consumers - landlords and tenants - the right to impartial and independent redress, with the aim of resolving disputes with agents.
One of these organisations - The PRS - recently published its 2016 annual report, which gives a good insight into the most common complaints..
- The PRS received a total of 384 formal complaints in 2016, up 40% on 2015.
- Tenants and landlords accounted for over 85% of total complaints (51% by tenants, 35% by landlords).
- Property management (29%), deposits (27%) and 'problems with rent' (15%) were the three most common reasons for consumer complaints.
- During 2016, The PRS awarded a total of £152,819, with an average compensation award of £375.27.
- It took an average of 108 days to complete a case from notification of complaint to decision.
- 95% of decisions were accepted by the complainant.
You can download The PRS' report in full here.
What can we take from these figures?
One of the main reasons for an increase in complaints last year is due to an increase in membership. The scheme's membership number jumped from 3,941 in 2015 to 5,259 in 2016. On top of this, The PRS also believes there is a growing awareness of the property complaints process among consumers.
Another reason for a higher number of lettings complaints is continuing legislative changes to the Private Rented Sector which means there are now more issues to trigger complaints against agents than ever before. Add in to this a rental sector that continues to grow at a rapid rate and it's clear to see why complaints against letting agents are on the rise.
The fact that the highest number of complaints made against agents relate to management, reiterates the need for traditional skills such as good communication, record keeping and high levels of transparency. It's clear these values still hold a lot of weight with consumers and clients.
It's likely that problems with deposits and rent will always feature prominently in lists like this as financial matters will continue to drive a high proportion of complaints. What it does remind agents, though, is that they must remain compliant and stick to stringently set out processes in order to reduce the chances of attracting consumer complaints.
How does this report compare to TPO's?
The Property Ombudsman scheme released its annual report back in June and it's interesting to look at the similarities and differences with the figures released by The PRS.
TPO received a total of 14,218 enquiries and resolved over 3,500 formal complaints - a 7.5% rise when compared to the previous year. In total, the scheme paid compensation awards of £1.2 million, up a staggering 51% on the previous year's figures.
Interestingly, 51% of TPO's lettings complaints were made by tenants and 45% were made by landlords - a reasonably similar divide to the one published by The PRS.
Meanwhile, TPO's average lettings award was a little higher than The PRS at £531.
The top four causes of lettings complaint recorded by TPO were management, communication and record keeping, in-house complaints procedure and referencing.
In general, TPO's figures are higher than The PRS' as it is a bigger scheme representing almost 40,000 agency offices.
However, it is very interesting to note that management was also the top cause for lettings complaints.
Looking ahead, it seems that if there is one side of business that letting agents could improve to reduce complaints, it's management. This issue affects both tenants and landlords and is a huge part of the rental process.
It's therefore no surprise that it attracts a high number of complaints but this means that agents need to pay even more attention to their management processes to maintain and improve their levels of customer satisfaction.