Lettings Rise, But Agents Are in the Spotlight

As the uncertainty over the housing market looks set to grind on for much of 2012, the lettings industry as a whole has attracted some unwanted media attention this week with news of a significant rise in the number of complaints against agencies.

In 2011, the number of enquiries received by the property ombudsman rose by 26% from 2010 to 7,641 and this has prompted calls for the whole industry to be reformed and regulated. At present, agents are not obliged to register with a redress system such as the Ombudsman, who feel that making such action compulsory will lead to a rise in standards and a reduction in complaints.

A parallel can be seen from 2007, when Estate Agents were obliged to register with the Property Ombudsman. As a result, it is widely accepted that standards have improved, although a 10% rise in complaints has also been reported for sales agents in 2011.

Ombudsman Christopher Hamer went on to express his dismay that 25% of the lettings related complaints in 2011 were against landlords and agents not registered with the redress scheme and he was therefore powerless to act.

“I am concerned that, for those consumers, they may have little alternative but to undertake potentially costly legal action to pursue their complaint, a daunting prospect in the current financial climate,” Mr Hamer declared.

He also went on to point out how rogue agents, who were unregistered with the scheme were a threat to landlords and tenants alike.

“Knowledgeable landlords already check if an agent has a separate account for client money and has signed up to a redress scheme, before allowing them to market their property,” Mr Hamer added.

“However, landlords who are new to lettings, will no doubt be attracted by lower fees and may not enquire what protection the agent can provide both them and their tenants should problems later occur,” he concluded.

Reports received throughout 2011 claimed a rise both in property rentals and the cost of renting and many agents confirmed that demand was far outstripping supply. That trend seems set to continue for 2012 and therefore the Ombudsman’s reports are a worrying development.

Ian Potter, of the Association of Residential Lettings Agents is one of many who is backing the Ombudsman’s call for a compulsory redress system.

“It was interesting to note that only 10% of those complaints merited adjudication by the Ombudsman, and it should also be noted that there were almost 900 new lettings members despite some consolidation in the industry,” Mr Potter said.

“That said, it comes as very little surprise given there is no national regulation in place to stop rogue agents setting up shop and taking advantage of what is a fragile market.”

Tenants and Landlords Urged to Be ‘Gas Safe’ This Winter

As the winter months approach, we’ll all be reaching for the heating controls to turn up the heat.  This week marked Gas Safety Week, a drive to remind the public about the importance of safety measures and checks where gas is concerned.

So, what can landlords and tenants do to ensure they keep safe this winter?  The HAS Gas Safety Statistics 09/10 reported that a total of 10 people died due to gas related accidents and incidents across the UK last year and that a further 330 needed hospital treatment.  With that statistic in mind, it hits home how important it is to carry out regular checks and that applies to tenants, landlords and homeowners.  Landlords and building owners are legally responsible to arrange annual safety checks and necessary maintenance and should ensure all works are completed by a Gas Safe registered engineer.

If you are a tenant and think you might have a problem with a gas appliance, get onto your landlord immediately.  They have a legal obligation to arrange emergency assistance and should provide assurances that the matter is in hand as quickly as possible.

These checks will help to ensure that pipes, appliances and flues are in a safe condition, all gas equipment is safe prior to letting, and that gas safety records are maintained for the property.  Checks also ensure that potential problems are spotted and rectified before a major incident can occur.  Leaking gas and unsafe appliances are a very real hazard and can kill it not attended to immediately.

Paul Johnston, chief executive at Gas Safe Register said: “Every year, far too many people suffer from preventable gas related accidents, such as gas leaks, explosions, fires and carbon monoxide poisoning. If maintained and installed properly, gas appliances are safe. If neglected, gas appliances can kill.”

It’s so important that you use Gas Safe registered engineers.  These industry experts have undergone rigorous training and assessment and have the skills and expertise to spot problems and deal with them safely and completely.  Before you employ any engineer it is essential that you check their ID and you can also check them out on the Gas Safe website.

Buy to Let may be the investment of choice, says Ed Mead

For the first time since I’ve been at Douglas & Gordon we made more money last month from lettings than we did from sales.

Given that we are a medium sized company that’s not as trite as it sounds. Renting seems to have finally lost it’s stigma and even seems to be where sensible people reckon they should be when property values appear to be on the way down.

Those who work in lettings have often felt, because of the lack of crash bang months, that the drip drip [albeit constant] nature of their income means they’re the poor cousins.

But with buy to let borrowing on the agenda again and with all the publicity surrounding Council tenants suddenly they’re front page news.   About time I reckon. Having rented for over 20 years and been dead pleased with it, many commentators were amazed and quick to point out how I was missing out on the market.  I politely replied that I had been investing in something slightly old fashioned and possibly more rewarding. It’s called your own company.

Such is the obsession with property (thank heavens as I’m an estate agent after all) that investing in something that actually yields jobs AND a return seems to have become a lost art.  With 70% of the world’s wealth now tied up with property it’s hardly surprising.

Perhaps with standard investments yielding derisory returns entrepreneurs might start to see the light of day again, but with residential rents looking set to rise sharply, capital values stagnant at best, and borrowing costs as low as they’ve ever been I would think buy to let might just become the investment of choice for a few years to come.

Author Biography

Ed Mead is a regular contributor to The Big Property List blog.  He has been an estate agent for over 30 years, and has been writing and commentating on the market for over half of that as the Sunday Times Property Expert and The Agent Provocateur for the Telegraph.  He sits on the Board of The Property Ombudsman Ltd, has a regular LBC slot, and is happy to say it as it is.

Other places you can find Ed online are:
Douglas & Gordon blog
Ed Mead on Twitter