A property boss has warned that the alarming case of a rogue letting agent has underlined the need for urgent change in the private rental sector.
This week, rental manager Angela Clift from Tyneside, was jailed for two years after stealing £400,000 that she was supposed to have collected on behalf of landlords. The money was intended to have been taken on behalf of Newcastle based property firm Keith Pattinson.
On raiding Clift’s property, police found expensive handbags, clothing and jewellery, not to mention an expensive sports car parked outside.
Upon sentencing, the judge described Clift’s actions as ‘breathtaking.’
Now, Ajay Jagota, founder of sales and lettings firm KIS, believes immediate change is needed to stop this kind of action happening again. At present, an estimated £500m worth of rental deposits are thought to be illegally held.
Jagota said, ‘although I wasn’t in court to hear the exact details of this case, incidents like these are the inevitable outcome of an industry where too much money is flowing around unnecessarily with inadequate oversight over where it ends up. You’ve got tenants handing over hundreds and thousands of pounds in deposits and rent and landlords acting in good faith that it will be money will dealt with appropriately. Of course most agents do just that, but five minutes on Google will show you that is not always the case.’
Mr Jagota continued by saying, ‘we’re not just talking about a few quid here and there. We’ve got £500m of rental deposits apparently held illegally and firms collapsing owning hundreds of thousands of pounds-sometimes having been given a clean bill of health by industry watchdogs. And those are just the cases we hear about. That can’t be right.’
‘The simplest solution is to stop taking deposits and move to an insurance-backed model. It’s not just that it works perfectly well in other industries, it’s that you’ think it was ludicrous if people did it any other way. If you rent a car, you don’t hand over hundreds of pounds before you’re given the keys on the understanding that you’re guaranteed to crash it!’
Concluding, Jagota said, ‘the overall value of UK rental deposits is estimated to be £3.2bn. Having people handing over so much cash to an under-regulated industry is something which can’t continue-not when there are simple and effective solutions under our noses.’