The number of awards that The Property Ombudsman ordered agents to pay last year broke the £1m mark for the first time.
In her annual report for last year, published today, TPO reveals that the total amount was £1.2m, up 51% from the previous year. The highest award was almost £22,000.
During 2016, a total of 14,218 enquiries were received by TPO from consumers seeking advice, and of these, 3,553 proceeded to become formal complaints, up 7.5% from 2015.
But despite the rise, the number of complaints represented only a tiny proportion of transactions in the industry – for example, there were 1,310 sales complaints resolved by TPO last year, equating to just 0.1% of all sales transactions completed during the year.
Ombudsman Katrine Sporle said: “It is evident that the vast majority of consumers are happy with their agent.”
A total of 1,997 formal complaints against letting agents were resolved – 76% of which were supported. Half (51%) were made by tenants and 45% by landlords. The highest award was £21,972 and the average was £531.
In sales, 1,310 complaints were resolved, of which 73% were supported by the Ombudsman. Most (61%) were made by sellers and 35% by buyers. The average sales award was £397.
There was a 6.1% increase in the number of sales agents last year, and a 7% rise in the number of letting agents in the scheme.
Sporle said that altogether, there were now 38,017 offices and departments following TPO’s codes of practice.
She said that while there had been a decrease in enquiries last year, there was a 27% rise in initial complaints in the first quarter of this year – predominantly from tenants.
The case of the highest award where the agent was ordered to pay £21,972 concerned an agent’s use of a third-party referencing firm.
This outsourced firm failed to verify the tenant’s identification, although it was the agent that paid the price.
TPO said outsourcing referencing was “common practice for many agents”. She went on: “This crucial and costly mistake could have prevented the tenancy from commencing, as well as the court action which ensued when the tenant failed to pay any rent after their first month.”
The top four causes of complaints against letting agents were: management; communication and record keeping; in-house complaints procedures; and referencing.
The top four complaints against sales agents were: communications and record keeping; marketing and advertising; instructions, terms of business, commission and termination; and in-house complaints handling