“Protection racket” renting in need of urgent reform
 
Published on 27 Jan 2017
  • Property campaigner writes open letter to Housing Minister

  • “This is the sector’s dirty little secret which we are exposing and either government is aware and complicit or not aware and incompetent, there can be no excuse not to act and reform cash tenancy deposits”.

Read Ajay Jagota's letter to Gavin Barwell HERE

The closure of yet another letting agent – leaving yet more customers owed their deposits - has led a leading property campaigner to compare renting in the UK to “a protection racket where paying the right organisations lets you pretty much do as you please”.

Property campaigner Ajay Jagota is seeking an official government response to a series of crimes and misdemeanours in the tenancy deposit scheme which is officiated and run under their supervision.

Housing Minister Gavin Barwell has so far declined to meet with the campaigner to discuss the problem. Ajay Jagota has now published and open letter to the minister requesting and urgent meeting.

Morgan Hampton of Wimborne, Dorset, recently became the latest letting agents to shut up shop leaving behind a queue of customers claiming their deposits have gone missing.

Dorset Trading Standards have now confirmed they are investing the firm and have been quoted confirming that: “The main allegations involve the theft of customers’ deposits.”

The company does not appear to have been a member of compulsory rental redress scheme, and the firm’s tenancy protection scheme DPS has declined to answer a number of questions put to them by deposit reform campaigner Ajay Jagota.

A source close to the case alleged that “if this is a case of fraud, we have no idea what the scale of that fraud is. This is just the tip of the iceberg.

The source continued: “Deposit money is just sat there. If someone is going to act fraudulently, then it is really easy to do that.”

The case follows that of a member of staff of Smith Gore in Newmarket was convicted of embezzling £16,000 of tenancy deposits. The company was acquired by Savills at a similar time to when the crimes came to light.

Property campaigner Jagota, founder of sales and lettings firm KIS and deposit-free renting solution Dlighted, has submitted a number of questions to ARLA, DPS and affected companies in an attempt to get to establish what has happened. 

All those contacted have declined to answer. Jagota is also writing to Dorset MP Michael Tomlinson for his comments.

Jagota said:

“Renting in the UK is starting to feel like a protection racket where paying the right organisations lets you pretty much do as you please.

“We’ve been trying to get to the bottom of what has happened in this and several other cases, where tenancy deposit schemes, redress schemes, industry bodies like ARLA the firms involved have been members of have been fundamentally unable to prevent serious wrongdoing and are now unwilling to answer our questions.

“It shouldn’t be left to us to do that. I believe in self-regulation, but this is ridiculous! 

“This is the sector’s dirty little secret which we are exposing and either government is aware and complicit or not aware and incompetent, there can be no excuse not to act and reform cash tenancy deposits.

“In the Newmarket case, the timelines suggest to me the crimes may not have not come to light had Savills not moved to take the firm over. Savills have declined to comment, but if this is the case it shows that the only people policing what lettings agencies are doing with money which belongs to their tenant’s are other letting agents!

“£2.4bn of deposits are currently held by letting agents in insurance tenancy deposit schemes. As our whistleblower says, if people want to act fraudulently it is really easy to do that. The entire system is in urgent need of reform

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