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Why are consumer complaints against letting agents on the rise?

Posted on 2018-06-26

The Property Ombudsman (TPO) – the government-approved scheme offering independent and impartial redress for consumers and agents – recently released its annual report for 2017. In it, Property Ombudsman Katrine Sporle revealed that the number of complaints received went up by 3% to 3,658, with financial awards to consumers in 2,408 cases totalling £1.36 million, a rise of 11% on the previous year.

But what are the reasons behind this increase in complaints?

What did the report say about lettings?

Nearly half of the complaints against letting agents were made by landlords (49%), while 45% were made by tenants. In all, 2,212 formal complaints were resolved by TPO (up by 11% on 2016). Some 67% of complaints were supported by the Ombudsman, with the average lettings award being £625.

The regions with the highest level of complaints, for the second year running, were Greater London (23%), the South East (20%) and the North West (11%). The main causes of complaints were management, communication and record keeping, tenancy agreements, inventories and deposits and in-house complaints procedure.

 Why has there been a rise?

There are more people than ever before in private rented accommodation, with the private rented sector now accounting for 20% of all households in the UK. It is now the second largest housing tenure in England and the biggest in London. This is only set to grow in the coming years, with a report by Knight Frank suggesting that 24% (5.79 million) of households will be renting privately by 2021.

While young professionals are most likely to rent, there are a growing band of middle-aged and retired renters helping to swell the market too. The number of retired renters increased by 200,000 between 2012 and 2016, according to the National Landlords Association (and, if forecasts are to be believed, is expected to nearly treble in the next 20 years), while the number of families with children renting privately reached 1.8 million in the last English Housing Survey, up by a million in less than ten years.

Equally, middle-aged renters are on the rise, with recent research finding that fortysomethings are now almost twice as likely to be renting from a private landlord than they were a decade ago.

The increasing number of people in private rented accommodation could be one reason for the rise in the number of complaints. Additionally, the demand for quality, well-maintained rental property has inevitably gone up as more people reside (through choice or necessity) in this type of housing for longer. In some cases, these rising standards may not be being met.

Perspective is needed

Although a rise in the number of complaints is a cause for concern, it’s important to remember that the numbers at play here are relatively low given the number of people operating in the private rented sector.

While more can always be done to improve standards across the board, it’s important that the lettings industry as a whole isn’t tarred with the same brush – for every complaint made, there are many more satisfied customers that aren’t mentioned in TPO’s report.

In addition, the report offered grounds for encouragement. Some 38,272 offices and departments now follow TPO’s Codes of Practice, approved by the Chartered Trading Standards Institute (CTSI). Katrina Sporle also said it was promising that ‘complaints have risen by just 3% and that 10% fewer agents had to be referred to our Disciplinary and Standards Committee’.

She added: “Overall, 2017 represented a positive year of innovation and improvement, which will reassure consumers and the industry that there is an alternative to costly and lengthy court proceedings.”

What needs to be done?

 

  • The Government believes that there are gaps in the current provisions of consumer redress within the property sector which need addressing. TPO, together with industry and consumer partners, are keen to play a part in regulation and redress reform.
  • Improving redress and driving up the standards of the industry as a whole, will help to improve the reputation of letting agents and reduce the number of complaints being made by landlords and tenants.

 

What can letting agents do?

Fortunately, there are a number of steps you can take to improve your customer service and be proactive in dealing with any complaints if they happen to come your way.

The top causes of complaints are all things that can be remedied – make sure your communication and record-keeping logs are up to scratch, ensure a clear and practical in-house complaints system is in operation, protect deposits in the appropriate way, work with experts in their field to ensure tenancy agreements and inventories are drawn up in the correct manner, and make sure all members of staff are operating to the highest standards at all times. 

Abiding by industry regulation, signing up to TPO’s Code of Practice (if this isn’t the case already), and ensuring best practice across all your services will all help to limit the possibility of complaints being made.

If you do still receive complaints, work with an independent redress organisation – such as TPO – to resolve the disputes in a fair and timely way. 

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