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Agent says lettings sector "starting to feel like a protection racket"

A campaigning lettings agent is demanding action over what he suggests is a tenancy deposit system that is in need of drastic and urgent reform. 

“This is the sector’s dirty little secret which we are exposing. Either government is aware and complicit or not aware and incompetent - there can be no excuse not to act and reform cash tenancy deposits” says Ajay Jagota, chief executive of the Keep It Simple Group.

Jagota has submitted a number of questions to ARLA, DPS and affected companies in an attempt to get to establish what has happened in a series of cases involving letting agencies where deposits have gone astray. In addition to seeking a meeting with housing minister Gavin Barwell - so far unsuccessful - Jagota is also writing to Dorset MP Michael Tomlinson for his comments.

“Renting in the UK is starting to feel like a protection racket where paying the right organisations lets you pretty much do as you please. We’ve been trying to get to the bottom of what has happened in several cases where tenancy deposit schemes, redress schemes, industry bodies like ARLA the firms [have been] involved. It shouldn’t be left to us to do that. I believe in self-regulation, but this is ridiculous” he says. 

Jagota says Morgan Hampton of Wimborne, Dorset, recently became the latest letting agency to shut up shop leaving behind a queue of customers claiming their deposits have gone missing.

He says Dorset trading standards has now confirmed it is investigating the firm and has been quoted confirming: “The main allegations involve the theft of customers’ deposits.”

That case follows the incident when a member of staff of Smith Gore in Newmarket was convicted of embezzling £16,000 of tenancy deposits. The company was acquired by Savills around the time the crimes came to light.

  

“In the Newmarket case, the timelines suggest to me the crimes may not have not come to light had Savills not moved to take the firm over. Savills has declined to comment, but if this is the case it shows that the only people policing what lettings agencies are doing with money which belongs to their tenant’s are other letting agents” he says.

“Some £2.4 billion of deposits are currently held by letting agents in insurance tenancy deposit schemes. As our whistleblower says, if people want to act fraudulently it is really easy to do that. The entire system is in urgent need of reform.”

  • Mark Wilson

    If the entire system is in urgent need of reform, taking this article to its natural conclusion, rent collection will need to be in custodial environment. This article is a rant not a campaign.

  • icon

    good point - Why wouldn't you want rents in a custodial environment, after all, it's not the agent's money?
    We could always wait until further agents who suddenly cease trading and then expose that all the tenancy deposits that should have been protected have gone missing?
    I would have thought in the current environment where the spotlight is on the sector that self-regulation would be the preferred choice particularly with client money... we could always just let government intervene!

  • Mark Wilson

    Government is already intervening, have you read the Consultation on proposed 'banning order offences' under the Housing and Planning Act 2016?

    Whilst being a victim of a crime is a horrible experience and a breach of trust, one needs to be objective. In this case how to regulate a sector that is already drowning in red tape.

  • Kristjan Byfield

    Its a worthy point worth addressing- but failure to enforce compliance is nothing ew in our sector. However, lets not forget that he is selling a product as an alternative to deposits. Im sure that has nothing to do with it.

  • icon

    ....and unless we address the problems that exist in the sector, then expect further government intervention/red tape.
    I am merely highlighting the current issue to which the sector and associations have thus far have failed to address, although plenty within it know the severity of the problem.
    The public and media are only alerted when the agent along with the money has gone which is all too late!
    Our product is indeed an alternative to cash deposits, which is a solution but I'm sure it's not the only one, and as always, the market will decide.

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