Last year, the number of complaints against letting agents soared, making them by far the biggest part of the Property Ombudsman’s workload. Landlords were slightly more likely to complain than tenants.
The number of complaints against sales agents was also up, but formed only 27% of the workload, against the 53% formed by complaints about letting agents.
In 2012, the Ombudsman received a total of 15,782 complaints, including those made against both sales and lettings agents, a 12% increase from 2011 when there were 14,066 complaints.
The increase of 1,716 initial complaints was compounded by a 39% increase in the number of cases referred for formal review or easy resolution (up from 1,419 in 2011 to 1,970 last year).
The increased workload caught the service out, Ombudsman Christopher Hamer admitted. He had forecast the workload to be 16% less, which meant longer times to review complaints. He said: “We are gradually bringing the situation back to a more acceptable level.”
Individual letting inquiries increased by 9% (to 8,334) during which consumers raised a total of 14,017 different issues. Of those complaints, 934 proceeded to formal review, up from 768 the year before.
Landlord complaints, at 399, were ahead of tenant complaints at 330, with third parties responsible for nine of the complaints that went to review. Strikingly, the large bulk of complaints that went to review were from Greater London (25%) and the South-East (26%).
In total, the Ombudsman supported almost three-quarters of complaints against lettings agents (73.8%).
Poor service was the biggest cause of complaint (54%) while issues about letting agent fees and charges were raised in 12% of inquiries.
Of those cases which went on to be investigated by the Ombudsman, 50% of issues concerned poor service whilst the percentage of fees and charges issues increased to 20%.
There were also complaints about holding deposits, and Hamer has expressed his own views on these, saying that where an agent retains a sum of, typically £500, which is kept when the tenant pulls out, that is not a fair approach.
He says that agents should only charge a prospective tenant up-front for referencing and “any other reasonable administration costs”. It should also be made absolutely clear that a prospective tenant stands to forfeit these amounts if they do not proceed, but if they do go ahead with the tenancy, that the money is credited against future rent.
Currently, 11,933 sales offices and 9,748 lettings offices are signed up to TPO. Last year, 1,047 new letting agents joined.
The Property Ombudsman’s 2012 Annual Report can be downloaded using the link below. It is particularly worth reading for the case studies, including the one about the landlord who regularly used the tenants’ loo – a matter which cost the agent more than a penny. Another case resulted in an award being made against the agent for £6,275 after the agent’s “reckless referencing”.