Industry body has called for an investigation into the lettings sector as landlords cash in on booming rental market. RICS has called for a crack down on rogue lettings agents Photo: ANDREW HASSON

10:43AM GMT 22 Nov 2012

A clampdown on the lettings sector is needed to stop rogue agents turning it into "the property industry's Wild West", the Royal Institution of Chartered Surveyors (RICS) warned today.

RICS said its research highlights the risks of unscrupulous lettings agents cashing in on the rental boom amid "a total lack of effective regulation".

Two thirds of more than 1,000 people who have rented a home in the last two years in England said they did not receive an inventory when they moved into their property, which RICS said showed the "worryingly low standards" tenants have come to expect.

Demand in the rental sector has rocketed as people have been unable to buy their own home, either because they cannot raise the deposit needed or meet lenders' toughened borrowing criteria in the difficult economy, which has pushed up the cost of renting.

RICS warned that it is currently possible for people to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process and it is not compulsory for them to conform to codes of conduct.

Several calls have been made for better protections for people living in the private rental sector in recent months, with Shelter reporting in September that almost a quarter of people feel they have been "ripped off" at some point by letting agents' charges.

Around 23pc of people surveyed by the housing charity believed they had been landed with unfairly high fees for aspects of renting such as credit checks, renewing contracts and "administration".

Shelter said it had found cases of renters being charged more than £150 for repeat credit checks every year, which the charity said actually cost between £8 and £25 to perform.

It said some people were being charged £100 just to view a property and renters were being charged up to £540 in non-refundable "administration" fees.

Peter Bolton King, global residential director for RICS, said: "A good lettings agent can be worth their weight in gold for both landlord and tenant.

"However, there are too many corrupt agents that do not belong to any professional body who are taking advantage of the current gap in regulation, putting consumers at risk.

"Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges.

"What we would like to see is the Government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable."

RICS found that while nine out of 10 tenants surveyed said they were satisfied with their lettings agent, there was confusion over agents' legal requirements, with four out of five renters believing that agents are required to abide by a Government, ombudsman or regulatory body code of practice.

Some 87pc of tenants surveyed supported the call for a single compulsory regulation scheme for all lettings agents.

Housing Minister Mark Prisk said: "People living in private rented homes deserve to be treated fairly and honestly.

"While the report shows the vast majority of tenants are satisfied with their lettings agent, I'm appalled that some agents are abusing their position and giving the whole industry a bad name.

"We are determined that all tenants receive a good service, but we want to avoid excessive red tape that would push up the cost of rents and reduce choice for tenants.

"That's why we have strongly backed industry-led schemes such SafeAgent."

Mr Prisk said that lettings agents are already subject to consumer protection legislation and any tenants who have suffered from poor practice should report the problem to their local trading standards officer or the Office of Fair Trading (OFT).

He added: "I would urge anyone wanting to rent or let a property to look for approved agents so they can be confident they will get a secure and good quality service."

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