A nationwide survey carried out by The Property Ombudsman (TPO) scheme has revealed that 90 per cent of tenants fail to ask how their money will be handled by their letting agent.*
TPO agreed to undertake the online survey in collaboration with Baroness Hayter of Kentish Town, who is chairing a Government review into Client Money Protection (CMP) with Lord Palmer of Childs Hill.
The results reflect the views of the 680 letting agents that took part in the survey, who shared their views on a range of topics and issues to assist with the CMP review.
The scheme presented its findings to the Government’s working party which met in November to discuss whether CMP should be made mandatory for letting agents.
A summary of TPO’s survey results revealed the following:
• 73% of letting agents confirmed they belong to a Client Money Protection Scheme
• 82% of firms said their business complied with the requirements under the Consumer Rights Act 2015
• 20% of TPO member agents said they were encouraged to take out this policy as a result of the transparency requirements. (64% of agents answered ‘No’, while 16% of firms responded ‘N/A’)
• 92% of respondents said they currently operate a ring fenced client account for clients’ money
• Agents that said they hold a separate account for clients’ money were asked if they have one single account or multiple accounts for different branches/clients, with 78% confirming they held a single account, while 22% of respondents said they operated shared accounts
• UK letting agents confirmed that 11% of their landlords routinely asked them about their policies and procedures for handling clients’ money
• UK letting agents confirmed that 10% of their tenants* routinely ask them about their policy and procedures for handling clients’ money
• 39% of survey respondents said they held their tenancy deposits themselves, through an insured deposit scheme, while 61% of firms said their deposits were held by a custodial scheme.
The Government’s review into CMP was announced in August, following the introduction of the Housing & Planning 2016 Bill, which included a provision that could allow the housing minister to make CMP cover mandatory for letting agents.
The Government is currently analysing the findings and we will keep members informed of developments. To find out more about the CMP review, please visit the Department for Communities and Local Government’s website.