In a wide-ranging report on the lettings market, the OFT highlighted surprise additional fees as a common problem for landlords and one that made it difficult for them to pick the best lettings agent.
It said: “Landlords who are unaware of all of the fees charged by letting agents before signing a contract and the likelihood of incurring these fees will be unable to assess the overall cost of renting their property through a letting agent.
“Landlords, therefore, may not be in a position to be able to compare the ‘overall’ price of one contract against another. In these circumstances landlords may take a contract that they may not otherwise have taken had they been able to compare contracts.”
The report recommended fees should be set out in a clear tarriff of charges, a general redress mechanism introduced to allow landlords and tenants to sort out problems when they occur, and an enforcement strategy for traders who did not comply with the law.
It was not guidance in itself but designed to inform policy, the authors stressed.
It comes shortly after the Royal Institute of Chartered Surveyors suggested landlords could benefit from the regulation of lettings agents by over £8.6m.
Regulation would also improve communication between agents and landlords and save landlords time, it suggested.
