Ahead of tomorrow’s local and European elections, lobbying group Generation Rent has stepped up its attacks on letting agents and landlords.
It said they are “astonishingly unregulated”.
The group also published a proposed General Election “manifesto” for tenants, demanding the abolition of letting agent fees, calling them unclear and over-charged.
Generation Rent is also demanding the reform of tenancy deposit protection schemes, including a ban on insurance-based schemes – TDS and Mydeposits.
The manifesto also suggests that insurance-based schemes should protect deposits for the life of the tenancy rather than the landlord’s membership.
As revealed by Eye, there was a meeting last Thursday between all three tenancy deposit schemes and Generation Rent – politely described as “constructive”, although the two insurance schemes might not consider the proposed ban falls under that category now.
In a section on professional management in its proposed manifesto, Generation Rent says that “landlord and letting agent behaviour has become more exploitative”.
Sebastian Klier, of Generation Rent, said: “The Government has no real idea of how many private landlords or agents there are, let alone what they are doing.
“The stories of unresponsive landlords, or agents charging rip-off fees, are now so numerous as to be considered normal to tenants, whose expectations of the conditions in which they will live and the value they will get for their money has plummeted.
“Anyone can be a landlord or agent – the laws are weak and enforcement of those laws more so. Given this is an industry providing people’s homes – the most basic form of human security – this has to change.”
Klier also said that property conditions for private tenants are the worst in any of the housing tenures.
The campaign group, headed by director Alex Hilton who unsuccessfully ran for Labour in the last general election, launched its manifesto consultation on its various proposals for the private rented sector.
The consultation, which runs until June 6, will form a “renters’ manifesto” for next year’s general election.
It includes a call for rent controls, longer tenancies and greater regulation, including a national register of landlords and licensing of letting agents.
The Residential Landlords Association accused the group of simply playing to people’s fears with inaccurate accusations about the private rented sector.
It said that the Government’s own figures showed rents have risen by less than inflation, and that only 9% of tenancies are ended by the landlord. It also said there were numerous pieces of legislation in place.
The proposed manifesto can be found through the links here:
http://www.generationrent.org/renters_manifesto_consultation
I've long believed that insurance based products are a bad thing. What happens if the agent does a runner? The tenant may have protection via the insurance, but the landlord is liable for the deposit if the agent has run off with it.
And the chances are that a rogue agent will have not complied with the small print, so an insurer will be able to find get out clauses.
I can only see these products 'making sense' if the landlord holds the cash – but there lies another problem. Landlords are not impartial when it comes to resolving disputes.
If the deposit has been paid, it should be lodged in a deposit scheme. It is the only solution that makes sense and protects everyone. Personally I'd never use an agent who used an insurance based scheme.
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What is a rogue agent Glenn? You have used the term to make your point so will obviously be able to tell me and others what to look out for. I am not saying they don't exist I know they do but I am just having trouble pinning down what constitutes rogue.
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Simple Glenn, Just use a regulated agent with Client Money Protection Insurance in place
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What planet are these people on? I use TDS and it works fine, it's a selling tool as far as I'm concerned – there are other agents in my town who aren't licensed to hold clients monies themselves and have to send it away to an 'inferior' schemev – selling point? They can be perceived as not being trusted to hold clients money! My client's account is audited annually in line with NfoPP rules, I pay so many insurances and bonds to God knows how many people, I don't charge exorbitant fees and consider myself to be a responsible agent. Come on Generation rent, get with the beat!
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I use TDS and find them to be one of the most professional businesses in the property industry.
I do agree that a tenant's deposit must be absolutely protected for the life of the tenancy. If it's not, then no doubt this is another example of poorly written legislation; not a shortcoming of TDS.
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There are two issues here which cause most of the problems highlighted by Generation Rent:-
1) ODPM / DCLG calling the schemes 'insured', thus implying indemnity being granted to either landlord or tenant. It is the scheme that is ‘insured’ and the cost of participation is not a 'premium'.
2) Allowing the 'insured' schemes to 'unprotect' deposits, particularly when they have cause to believe there to be a financial problem with the agent / landlord.
When I was advising the government’s consultants on this point, I made it abundantly clear that any 'insured' TDP scheme (if they had to exist at all – most observers would say that a single custodial option is all that is needed) must fail safe – the CMP dimension would have assisted as a compromise. So, when my|deposits allowed, indeed encouraged, non 'regulated' (no CMP) agents to use their scheme, Capita bid, succeeded, but then abandoned, an 'insured' scheme that would have allowed non regulated agents to participate and then TDS recently did a u turn and allowed unregulated agents to participate in theirs, the whole 'insured' TDP concept was totally discredited. That is, with the exception of DPS ‘Insured’, which does fail safe (all participating agents must have CMP) as it does cover the whole tenancy and does not permit 'unprotection'. However, as with the other schemes the landlord is always ultimately financially responsible.
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Simple solution: If you are an agent registered with a regulatory body – give them an option. If you are not registered, make use of government DPS.
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