High levels of non-compliance found across the Capital
A survey carried out by London Trading Standards (LTS) has revealed that many letting agents in London are not being transparent about their fees and how they will protect tenants’ money.
In May 2018, councils checked the websites of 137 letting agents across London to find out whether the agents were following the law and whether and they were providing the correct information to prospective tenants.
It has been a legal requirement for letting agents to display a list of fees and have a Client Money Protection statement since May 2015. Three years after the legislation was put in place, LTS found:
- 53% were not displaying a Client Money Protection (CMP) statement
- 37% were not displaying landlord fees
- 31% were not displaying tenant fees
- 22% were not displaying evidence of membership a redress scheme
Until the introduction of the limited 2015 legislation, the lettings market was largely unregulated, causing many problems for landlords and tenants alike.
Trading Standards Officers carried out the research in light of the imminent introduction of a new package of more comprehensive rules to regulate the letting industry. These new requirements include:
- A ban on charging tenants fees in England
- A ban on landlords and their agents requiring tenants to secure and pay for services from any third party or to make a loan
- A cap on tenancy deposits, at no more than six weeks’ rent
- A cap on holding deposits at no more than one week’s rent – which must be returned to tenants
The new measures have the potential to improve the lettings market but this can only be achieved if resources are put in place for effective enforcement.
Private sector renting is at an all-time high in the capital, with around a quarter of households now privately renting – compared to a fifth in the rest of England. Rents are also highest in London and so it is crucial that tenants and landlords know what fees they are going to be charged.
Client money protection (CMP) schemes are vital as they protects clients’ money if a letting agent goes out of business or disappears. Currently letting agents do not have to be a member of a client money protection scheme but just have to state whether they are or not. However, next year membership of a CMP scheme will be a compulsory requirement. In the meantime LTS advises tenants and landlords to a use an agent that has client money protection.
Martin Harland, Chair of the London Trading Standards (LTS) Letting Agents Group and Principle Officer at Camden Council said:
“We are disappointed at the results of our research and we won’t allow letting agents flouting the law to get away with it. It’s simply not fair to the consumer or to a substantial part of the letting industry who go out of their way to do things right.”
“London Trading Standards wants to protect London residents and the businesses that trade fairly here. If you know an agent who isn’t publicising their fees or who isn’t complying with the law, let us know about it.”.
LTS will be following up the results of this survey with the relevant businesses to ensure compliance, and tenants and landlords are advised to contact their local authority it they are aware of any agents not displaying fees.
Anyone wishing to report a rogue agent can contact 03454 04 05 06 or use the LTS report consumer crime tool.
On 6 June London Trading Standards will also be giving a presentation at a national Trading Standards conference to showcase the pioneering lettings enforcement work being done in the London region.