Letting agents should give consumers upfront prices that clearly set out all their fees and charges, a new OFT investigation has said.
The OFT investigation has exposed several consumer protection issues in the lettings market, including poor service, surprise charges and drip pricing.
These findings echo the results of a Which? investigation carried out in November 2012 which also found high unexpected fees and drip pricing.
The OFT analysed nearly 4,000 complaints made by tenants and landlords and found that nearly one third (30%) were about fees and charges.
OFT recommendations for landlords and tenants
The report makes a number of recommendations in order to ensure the letting agent industry works better for tenants. The OFT wants fees to be set out more clearly, showing a breakdown of all charges.
It also says it wants to see more consistency within the industry so that common principles are applied, such as what information is used for pre-tenancy checks.
Further recommendations include better compliance with legislation, and in particular, better up front information.
Which? Executive director Richard Lloyd said: ‘The OFT’s recommendations are a step in the right direction, but we want the government and letting agents to go further.
‘Information on compulsory fees should be provided upfront, in adverts or at the first point of contact with an agent, so that people can shop around.
‘And the government must act quickly to require all agents to sign up to a complaints scheme so that tenants know where to turn for redress when things go wrong.
‘This should be done by amending the Enterprise Bill currently before Parliament.’
Which? letting agents investigation
Which? carried out an investigation in November 2012, which uncovered bad practice and a lack of consumer protection, failing both landlords and tenants.
Richard Lloyd added: ‘Our investigation uncovered bad practice, high and unexpected fees and a lack of consumer protection that’s failing both tenants and landlords.’
These included unexpected and unfair fees, with 41% of tenants thinking upfront fees were unfair.
Both tenants and landlords were found to have lost money through agents not paying on rent, unfairly handling holding deposits or failing to put deposits into protection schemes, as directed by law.
If you want to complain about unfair fees from a letting agent, find out how in our guide.