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Problems identified in lettings market by OFT report
The Office of Fair Trading (OFT) published a report on 14th February 2013 identifying several consumer protection issues in the lettings market and setting out the OFT’s proposals for improvements.
In light of the high level of complaints generated by the lettings market – a significant part of the UK economy – and the pivotal role played by agents, the OFT has reviewed the sector based on an analysis of almost 4,000 complaints lodged by both landlords and tenants, looking to propose a way forward. A lack of expertise in the market can leave those in the lettings market dependent on their agents to navigate complex housing law, rights and obligations. The OFT has highlighted criticisms of fees and charges levied by agents, poor service provided and ‘surprise’ charges which are introduced or ‘drip-fed’ once contracts have been signed. In addition, agents’ interests are not always aligned with those of landlords who instruct them or the tenants who may rely on them for guidance.
The report’s recommendations and next steps include:
• better compliance with legislation and in particular better up-front information. Fees should be set out in a clear tariff of charges
• a general redress mechanism so landlords and tenants can sort out problems when they occur
• more consistency within the industry so common principles are applied throughout the industry, such as what information is used for pre-tenancy checks
• a national strategy agreed between government, industry, enforcers and consumer bodies
• an agreed enforcement strategy for traders who do not comply with the law
• initiatives to make it easier for landlords and tenants to assess quality, such as recognised logos
• work with industry and consumer bodies to develop joint educational material such as ‘quick guides’ to help tenants and landlords understand their rights
The OFT is hosting a series of events with parties involved in the lettings industry to discuss its findings and recommendations, aimed at raising standards within the market.
It is also committed to develop and review its advice and education work, including developing new guidance on consumer protection laws for letting agents and reviewing existing guidance on unfair terms in tenancy agreements.
Later in 2013 the OFT will launch an online business advice tool aimed at businesses such as agents so that they understand their obligations.
Read the report at: http://www.oft.gov.uk/news-and-updates/press/2013/15-13