Ghostly goings-on in the rental market

In the spirit of Halloween, here’s a chilling ghost story…

Recently we were contacted by a worried home owner. Her house wasn’t haunted. But she had spotted her flat advertised for rent on Zoopla, despite currently living in the property with no plans to rent it out.

A letting agent had listed the property without permission from the owner.

It also appeared that the agent had been advertising other owner-occupied flats in the block for rent, without their owners’ consent.

The letting agent had repeatedly broken the law.

Curious to establish whether this practice was confined to a single, predatory rogue agent, or whether it was more widespread, we passed on the story to the BBC. Their investigation discovered that the practice, known as ghost-listing, is on the rise across London.

So why are letting agents ghost-listing properties, and what does it mean for renters?

There are two reasons why letting agents might be using ghost-listings:

Attracting Tenants

Due to the national housing shortage, letting agents just don’t have the stock to meet demand. There is a shortage of homes to rent, especially affordable homes.

For agents that don’t have enough good quality stock in desirable areas, ghost-listings can give the illusion that they do, thus getting more renters through the door.

And when a ghost-listed home disappears, potential tenants panic. They that feel the shortage of properties to rent is even more acute, and end up paying higher rents on the agents real properties, even if they didn’t initially want them.

Inflating Rents

If ghost properties are advertised with artificially high rents, it sends a false signal about what people are willing to pay for properties of that type. Other agents and landlords may feel mistakenly comfortable raising rents beyond the current going rate, so the rogue agent can then increase the rent on their real properties too.

So ghost-listed properties make renters pay more, adding fuel to the fire in an already overheated rental market. This is unacceptable, when rent already takes up a ghastly 47% of the average renter’s income.

They also significantly add to the time and effort required to search for suitable homes. Ghost-listing makes finding a rental property even more of a hellish experience than it already is.

So short of calling in the ghostbusters, what can be done about this phenomena?

Ghost-listings are materialising, and distorting the rental market, due to a lack of regulation. Some letting agents currently feel free to flout the law, safe in the knowledge that local authorities don’t have the capacity to police them. They need to be regulated properly for effective enforcement of the rules and a functioning market.

While there’s some regulation of the industry, it doesn’t go far enough to make sure all letting agents are behaving in a way we’d expect from a professional sector.

Every letting agent is legally required to join a government approved redress scheme. Redress schemes have the power to resolve a range of complaints, including poor service, rent not being paid to the landlord and disagreements over holding deposits. But despite the legal obligation for agents to join a redress scheme, nearly a fifth have not done so.

Letting agents that volunteer to be members of a professional body want to see greater regulation. They are held to the highest standards and are aghast by the poor practice of cowboys, who give the industry a bad name.

We need a national register of all letting agents, so local authorities can clamp down on agents who are breaking the law. Tighter rules will make it easier to catch offenders.

Then we can lay ghost-listings to rest once and for all.

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