The Government has approved three mandatory redress schemes that will offer impartial investigations of complaints in the private renting sector, this will now "mirror" the practise within the residential sales market.

Two schemes are already up and running which are The Property Ombudsman and Ombudsman Services Property. The Property Redress Scheme is not yet operational and information on the third approved scheme is scant.

Together the three redress schemes will impartially investigate such disagreements over poor service and hidden fees, as with the residential sales scheme when a complaint is judged to be correct then leaseholders, landlords  and tenants could receive reimbursement.

So far 60 per cent of letting agents have joined one of the schemes and the remaining 3,000 agents are being actively encouraged to sign up to one of the organisations before it becomes compulsory. 

The Property Ombudsman's Christopher Hamer said:“The Property Ombudsman experienced a 34.2% increase in consumer enquiries relating to letting agents not registered with TPO during 2013, which really underlines the importance of mandatory redress”

“Whilst my role as Ombudsman means that I am not a regulator and I can only review complaints after a dispute has occurred, making redress a legal requirement for lettings is a positive move. Clearly it would be better if complaints did not arise in the first place and robust legislation to enforce controls was in place."

Housing Minister Kris Hopkins said: “All tenants and leaseholders have a right to fair and transparent treatment from their letting agent. Most are happy with the service they receive, but a small minority of agents are ripping people off, and giving the whole industry a bad name.

“That’s why we will require all agents to belong to one of the official redress schemes. They will ensure tenants have a straightforward route to take action if they get a poor deal, while avoiding excessive red tape that would push up rents and reduce choice for tenants.”

George Spencer, chief executive officer of one of the UK's online lettings agencies said: “It is excellent news that the Government is finally acting to clean up the lettings industry and it makes sense that agents who aren't members of redress schemes will have to join the Property Ombudsman, the Ombudsman Services or the Property Redress Scheme.

"There are many decent letting agents out there but also a substantial rogue contingent that lack transparency on fees and are fleecing both tenants and landlords alike. At the very least, tenants and landlords should ensure their agent is ARLA and UKALA-registered but many people simply don't know that they are leaving themselves exposed if this is not the case.”