Rogue landlords and agents flourish as demand for rented homes soars
An increasing number of private tenants need to protect themselves against scams. Chiara Cavaglieri reports
Sunday 11 September 2011
Landlords and lettings agents are firmly in the driving seat with demand for rented property allowing them to push rents ever higher.
There are some 3.4 million rented homes in England alone, a 40 per cent rise over the past five years. Many desperate tenants are now falling victim to rogue landlords and greedy lettings agents who are cashing in.
The latest Royal Institution of Chartered Surveyors' (Rics) Residential Lettings Survey shows that 25 per cent more chartered surveyors reported a rise in demand than a fall. This rental boom has seen rents soar, with the average rent in England and Wales up 0.6 per cent to £705 per month in July, according to the latest Buy-to-Let Index from LSL Property Services. Tenants in London are finding life even tougher, with rents hitting a record £1,009 per month in July, marking an annual increase of 7.1 per cent.
"It is a landlord's market and this makes life tough for those trying to secure rented accommodation," says David Newnes, the director of LSL Property Services. "With demand far outstripping the supply, it's a real challenge for tenants to secure the properties they want. It's becoming rarer for rental properties to be let for less than their asking prices – and in many cases, agreed rents are exceeding them."
With so many people being forced to rent, more are finding themselves stuck with unscrupulous agents and landlords with nowhere to turn. Housing and homelessness charity Shelter has seen overall complaints about landlords increase by 23 per cent over the past 12 months.
With tenants in such a vulnerable position, the sector is crying out for some big changes. Last weekend, a new government-backed kitemark scheme, SAFEagent, was launched. It is designed to highlight to landlords and tenants which agents offer client money protection schemes. All agents displaying the SAFEagent mark will already voluntarily belong to a protection scheme operated by National Approved Letting Scheme (NALS), the Association of Residential Letting Agents (Arla), the National Association of Estate Agents (NAEA) and Rics. This means that any "client money", which includes tenants' deposits, will be reimbursed in the event of insolvency, or misappropriation by any party.
"There were so many high-profile agents that went bust last year," says Nick Cooper, the chair of the SAFEagent steering group. "One of the biggest industry complaints is that 'they hold our money, and if they go bust, how do we know we're going to get it back?' SAFEagent is giving clarity to a really cloudy area."
Beware of scams
Never hand over any money before viewing a property. Many online scams have been uncovered on listings sites such as Gumtree, with fake landlords getting prospective tenants to wire across money to secure non-existent properties. Last year, scammers even pretended to be members of the National Landlords Association by using its logo.
Costs can quickly add up if agents are charging for inventories, cleaning, and renewing contracts as well as what can be fairly vague "administration charges" running into the hundreds for what can seem to be little more than photocopying a few contracts and checking references.
Watch out for lettings agents that try to charge you twice for the same service, eg, an inventory, at the beginning and end of the tenancy.
Another thing to watch out for is contract renewals that change the terms of tenancy. Although on a two-month notice period, a colleague found her renewal included a six-month minimum stay, meaning she would have to stay in the flat at least eight months before she could leave. Some landlords may even sneakily charge a tenancy renewal fee without you agreeing to it beforehand.
Always ask for a full breakdown of any charges from the outset and try to get the landlord to do an inventory – or take one yourself including photos – so you can't be charged for damage you didn't cause. If the agent is registered with Arla or NAEA you can lodge a complaint if you feel the fees were unclear and unfair.
Above all, you should read the terms agreed in your contract. Most people are on assured shorthold tenancies (AST). With this type of tenancy, you can stay in your home for a fixed period such as six months, or on a rolling contract known as a periodic tenancy. The tenancy can end only if you and your landlord agree to "surrender" the tenancy, if you serve a valid notice, or if your landlord evicts you. If you're on a fixed term, you can leave from the date that term ends, but if you want to leave before you will be able to do so only if your tenancy agreement says so. If you're on a periodic tenancy, you must give at least one month's notice in writing.
Similarly, the landlord must give you written notice of at least two months if they want you out. However, under an AST, it's fairly straightforward for landlords to evict you, and if there are any rent arrears or late payments they may be required to give you only two weeks' notice to leave.
Look out for any one-sided terms, such as paying for repairs which are the landlord's responsibility. Before you move in, the property must be in a fit state; boilers, sinks and toilets should be in working order and gas, electrical and fire safety regulations must be met.
If during your tenancy your landlord refuses to carry out repairs, do not risk withholding your rent in case you are evicted. Instead, collect as much evidence as possible. You could even ask your council's environmental health department to do an inspection.
All letting agents or landlords collecting rents must protect your deposit in one of the three government-backed schemes: Tenancy Deposit Solutions (mydeposits.co.uk), the Dispute Service (thedisputeservice. co.uk) or the Deposit Protection Service (depositprotection.com).
"There are still some landlords out there who are flouting these rules," says Kay Boycott of Shelter. "It is vital that tenants are aware of some of the risks when privately renting and make sure their deposit is protected when they enter a tenancy."
If landlords fail to protect your deposit, they may be forced to pay three times the amount as punishment and all three deposit protection schemes offer a free dispute resolution service.
Kay Boycott, Shelter
"Increasing numbers of people priced out of the housing market, coupled with our chronic shortage of social housing, means that renting is fast becoming the only option for thousands more people. Unfortunately, this has led to a minority of rogue landlords who are taking advantage of this growing market."
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