A Labour MP has told the House of Commons that letting agents are “completely unregulated” and that tenants are being “held to ransom” by unscrupulous agents and landlords.

Southampton MP Alan Whitehead made the remarks after two Southampton letting agencies were expelled by The Property Ombudsman – meaning that, as expelled organisations are not admitted to other redress schemes, they are effectively out of business.

Whitehead told MPs in a Commons question time that: “A Southampton letting agency has recently been banned from trading for three years for not giving tenants their deposits back and using them for other purposes. The situation, however, as far as letting agents are concerned, is that they are almost completely unregulated and it’s pot luck whether Southampton residents actually get a fair deal from their letting agents or not.”

The companies, trading as ‘The Flat Agency & Michael Browns Ltd’ and ‘Property Vibe Ltd’, have been expelled from lettings redress membership of TPO for a minimum period of three years.

The decision to expel The Flat Agency & Michael Browns Ltd follows complaints made against it from local landlords and tenants. The complaints were independently reviewed by the Ombudsman and all were upheld. 

Property Vibe Ltd was also disciplined. Despite leaving the TPO scheme in 2015, after its membership ended due to its failure to pay its membership fees, Property Vibe Ltd was also disciplined for failing to refund money owed to complainants or pay an award of compensation. 

The Ombudsman criticised Property Vibe’s lack of response not only to the complainants but also to TPO which had provided ample opportunities to resolve this complaint without the need for a formal review.

“Both agents have failed to comply with the TPO Code of Practice by not providing any evidence to support their side of the story or demonstrate an appropriate complaints handling procedure. Their reckless management has caused avoidable aggravation, distress and inconvenience” says TPO chairman Gerry Fitzjohn.