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Time to rein in rogue landlords

The number of households, including many families with children, living in private rented accommodation has almost doubled in the last 10 years to 290,000.

This is an inevitable consequence of the banks and other mortgage providers applying tighter lending restrictions and requiring higher deposits. The acute shortage of social housing means that not only young people, but those of all ages, are increasingly dependent on private landlords and the 500 letting agents who manage their property and are involved in about 150,000 tenancy agreements a year.

In theory, with responsibilities such as securing tenants and carrying out repairs being undertaken by professionals, the service for tenants should have improved. On the contrary, complaints about letting agents to the UK's property ombudsman have increased by 123% in the past five years.

Graeme Brown, the director of the housing charity Shelter Scotland, describes house letting in Scotland as "reminiscent of the Wild West" because there are so many cowboy agents.

The main problem is that tenants are required to pay upfront charges in addition to a reasonable deposit and one month's rent in advance. These can range from up to £80 for a credit check to £200-£300 as a "holding" payment as an inducement to grant a tenancy or fees for checking an inventory, providing a copy of the lease, renewing or transferring a tenancy. All such charges are illegal in Scotland but many prospective tenants do not realise this. Tenants seeking help from Shelter have successfully recouped £13,000 paid in illegal fees. On this evidence far too many agents have been routinely flouting the law and those desperate for housing have been unable to resist pressure to pay charges. All tenants must now be given an information pack which sets out their legal rights and responsibilities, and the landlord's, but it is vital potential tenants are made aware of these before signing the lease.

An increase in the number of people renting their homes is not a bad thing in principle. It provides the country with a more mobile workforce, which is an important advantage when employment is fragile and work opportunities are not evenly distributed across the country. It is essential that tenants are treated fairly, are not subjected to hidden costs and have security of tenure so that they can become part of their community, knowing, for example, their children will be able to continue at the same school.

New legislation comes into force next week which will require all deposits from privately rented properties to be secured in a deposit protection scheme. That is an important step to prevent landlords unfairly retaining deposits at the end of a tenancy. As in any line of business, there are good and bad landlords and letting agents.

So far, fewer than one-third of letting agents in Scotland have voluntarily signed up to the Association of Residential Letting Agents and agreed to its code of conduct. The Scottish Government is to launch its strategy for private rented housing at the end of this month. It must include regulation and effective penalties if the rogue agents are to be reined in.

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Finance

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