Property complaints hit a record high

The Property Ombudsman today said complaints against estate agents were "unacceptably" high after he handled a record level of disputes during 2010.

The Ombudsman, Christopher Hamer, received 1,338 new referrals against property professionals during the year, the highest level recorded since the scheme was set up 20 years ago, and 28% above the previous peak reached in 2008.

The level of complaints was 40% ahead of his prediction for the year, and came despite the fact that property transactions are currently running significantly below normal.

Mr Hamer blamed the rise on an increase in disputes involving property sales, with 646 complaints made against estate agents during the year and 672 made against letting agents. The remaining disputes related to home information packs and residential leasehold management.

But he said that while complaints against sales agents were "unacceptably high", the Property Ombudsman's Code of Practice was having an effect on the industry.

He said: "The growing impact of the TPO Code of Practice is further borne out by my average award to compensate complainants for the agent's actions for sales in 2010 being £258 when in 2007 it was £547, an indicator that the gravity of complaints is diminished."

The single biggest cause of complaint was a communication failure between the agent and the consumer, which was cited in 214 disputes, followed by the way an agent had handled a complaint in 163 disputes and problems with sales details, advertising and marketing cited in 138 referrals.

Agents in the South East were the most complained about, accounting for 26% of the total, with those in the South West at the centre of 13% of disputes, followed by those in the East at 12%.

At the end of the year the scheme, which handles disputes between consumers, estate agents and letting agents, had 8,008 member firms, up from 7,332 at the end of the previous year.

Mr Hamer renewed his call for the Government to introduce better protection for tenants and landlords against rogue letting agents.

Unlike estate agents, letting agents do not have to belong to an ombudsman scheme, although many do belong to one on a voluntary basis.

He said: "Many agents conduct their business by following the TPO Code of Practice but there are still too many who are operating without that commitment to standards and without any external controls over what they do with client money.

"Whilst the Code of Practice is not intended to be a substitute for formal regulation it would at least mean all letting agents would be following a comprehensive set of standards designed to protect the consumer."

Ian Potter, operations manager of the Association of Residential Letting Agents (Arla), said: "The increase in the number of complaints recorded by the Property Ombudsman is unsurprising, given that the Ombudsman covered more tenancies during 2010.

"However, as the Ombudsman says, the regulation of letting agents is well overdue. The absence of regulation means the consumer is left vulnerable, with nowhere to go when there is service failure or fraud.

"Arla has long campaigned for the introduction of compulsory regulation of lettings agents, along the same lines as our own member-led licensing scheme, launched in 2009. This means there are client money protection and redress schemes in place if things go wrong."