As part of the report the OFT analysed nearly 4,000 complaints made by people either renting or letting out a property.
It found that both tenants and landlords were concerned about fees and charges levied by agents, poor service widely provided and that 'surprise' charges were introduced or 'drip-fed' once contracts had been signed.
The report sets out a number of recommendations for Government, industry, enforcers and others in order to make the market work better for tenants. The recommendations and next steps include:
• Better compliance with legislation and in particular better up front information. The OFT would like fees to be set out in a clear tariff of charges.
• A general redress mechanism so landlords and tenants can sort out problems when they occur.
• More consistency within the industry so that common principles are applied throughout the industry, such as what information is used for pre-tenancy checks.
• Government, industry, enforcers and consumer bodies to agree a national strategy.
• Agree an enforcement strategy for traders who do not comply with the law.
• Initiatives which make it easier for landlords and tenants to assess quality, such as recognised logos.
• Working with industry and consumer bodies to develop joint educational material such as 'quick guides' to help tenants and landlords understand their rights.
Cavendish Elithorn, senior director at the OFT, said: “Our findings show that tenants and landlords are often dissatisfied with their agents but we also know that most agents want to do the right thing.
“It's important that tenants ask for key information but we also believe that Government, industry and enforcers working together can have a real impact and improve overall standards in the lettings market.”
Ian Potter, managing director of the Association of Residential Lettings Agents, said: The OFT’s report highlights some of the problems with the rental sector.
“Today, the sector is expanding as home ownership becomes out of reach for many; however lack of regulation, and pressures on housing supply, mean some unscrupulous landlords and agents are able to take advantage of consumers, and are driving down the reputation and standards of the sector as a whole.
“We have long-called for a central system of regulation, and would agree with a number of the OFT’s recommendations to help improve the market. In particular, agents should always be transparent about the fees they charge, and the services associated with those fees.”
