HOUSE LETTING AGENCIES (Hansard, 23 April 1952)

§ Sir Geoffrey Hutchinson (Ilford, North)
This is not the most propitious nor the most convenient nor, indeed, the most agreeable moment for the House to direct its attention to the subject of letting agencies. Nevertheless, I desire the indulgence of the House to bring to its notice the activities of a number of very unwholesome persons who are conducting the business of letting houses and flats in circumstances which, I think, the House will regard as highly unsatisfactory.
These agencies have, in the main, come into existence during recent years, and, no doubt, they are the outcome of the current difficulties in obtaining residential accommodation of all kinds. I suppose that when any commodity is in short supply it becomes a bait for unscrupulous and dishonest persons. Agencies of this nature seem to be entirely harmful. They are an organised fraud upon the most credulous, the most ignorant, and the most helpless members of the public. In 686 common, I think, with many Members of the House, I have had my attention drawn by my constituents to the activities of these agencies, and have been furnished by them with some illuminating details of the manner in which these agencies conduct their business.
They all seem to have this common feature. They begin by collecting a fee from the person who solicits their services. Sometimes it is two guineas; sometimes it is three guineas; sometimes, I think, it is more. I have heard of only one agency that does not commence its relationships with its clients by collecting a fee from them. It is interesting to see for what service the fee is collected. I have here a receipt from one of these agencies in which the fee is described as a registration fee towards our expenses in endeavouring to find you suitable accommodation address unfurnished. For conditions see back. And on the back of the document there is this condition: This registration fee covers the person named herein for a period of 12 weeks, during which period we will endeavour to find suitable accommodation address. We cannot guarantee you will be suited in that period. In the event of not being suited, this fee is not returnable. 687 I notice that this particular agency inserted in the local newspaper an advertisement in which they offered particulars of seven flats.
In only two cases was it suggested that any charge would be made for furniture and fittings, and the charge in one case was £35 and in another case £100.
But they circulate to those whose names are entered on their books and who had presumably paid their fees, a weekly list containing particulars of flats. In the latest list which was circulated in that way there appear particulars of seven flats, and in each case a very substantial sum is asked for furniture and fittings. The highest sum, I think, is £550 which is asked for the furniture of a flat, comprising four rooms which lets at 45s. a week. Two years' rent are required to be paid in advance, so that before a person is able to take the flat at 45s. a week he has to put up a sum of about £680.
The lowest sum which is required for furniture and fittings for the flats included in this list is for a flat comprising two rooms that lets at 28s. a week, where £250 is asked. The House will not lose sight of the fact that in the case of this agency when a person has been on their books for a period of 12 weeks he has to pay another fee or he gets no more lists of vacant flats and houses.
I have another example here. In this case the fee is described as "in respect of being on our priority list." The fee charged is only 10s. What young married woman who is looking for a home would not be willing to pay 10s. in order to be put on somebody's list of priorities for an unfurnished flat?
Let me give the House another example of the activities of this type of agency. This was a gentleman who paid a fee of two guineas. It was a condition of payment that unless he was suited, one half of the fee would be returned to him. He was sent to a flat and when he got there he found that the owner of the flat required payment of £250, not for the furniture or the fittings but for the decorations. But what was more significant was this. The owner of the flat had never heard of the agency who had sent him to view it. My constituent then asked for half his fee of two guineas back, and in reply he 688 was told that they could not repay him the guinea because they were finding it difficult to meet their obligations.
What happens after the fee has been paid? In every case that has come to my notice the applicant is sent to premises where large sums are required to be paid for furniture, fittings, carpets, decorations and so forth. Sometimes when he gets to the premises he finds that they have already been let. In one case that I know of a gentleman went to see the flat on the day on which he received the notice that it was empty, and when he got there it had already been let.
Then, after a few weeks his name is removed from the list, unless he agrees to pay another fee. I have not heard of a case where anyone has succeeded in obtaining a flat through these agencies, and so I am not able to tell the House whether any further fee or payment is required if the applicant is successful in obtaining possession of a flat or house.
There are two or three considerations which I hope the House will bear in mind in judging this situation. The first is that no responsible or respectable estate agent would charge a fee before he had performed any service for the person from whom the fee was required. The second is that most respectable estate agents look for their remuneration to the owners of the property for whom they act as an agent. They do not reverse the procedure and act as an agent for the person who requires them to find him accommodation.
It is also fair to say this: An agent who charges his clients a fee for services ought to be able to render to that client some professional service in the matter of valuation or of advice as to the nature of the structure and so on. In this case the agent renders no such service and I suggest to the House that this mode of conducting an agency business is most undesirable.
If we can, we ought to protect members of the public who are too weak or too ignorant to protect themselves against the activities of these persons. What can we do about it? We must avoid doing anything which will restrict the activities of persons who are carrying on the necessary business of an estate agent in a perfectly lawful and legitimate fashion We have to be most careful that we do 689 not do anything to interfere unnecessarily with their work.
I hope my right hon. Friend might think that a useful first step would be to communicate with the presidents of the various professional associations and societies to which surveyors, auctioneers and estate agents, who carry on their business in a perfectly legitimate way, in accordance with the rules of these professional bodies, belong.
I must say that our task would be a good deal easier if all these persons who are carrying on the business of surveyors, auctioneers and estate agents were members of the professional bodies or were registered by their professional bodies as is done in other professions. This is something which these professional associations have had under consideration for a long time, and it may be that the appearance on the scene of this undesirable type of competition will hasten the success for their efforts. I would suggest—and here I must be careful in an Adjournment debate—that another solution might be that they should be required to register with another local authority. Registration of this kind is not a new thing. In London, employment agencies and lodging houses are required to be registered in this way.

§ Mr. Ede (South Shields)
By legislation.

§ Sir G. Hutchinson
Outside London nursing homes must be registered with the local authority.

§ Mr. Ede
By legislation.

§ Sir G. Hutchinson
Certainly. I hope the Minister will be able to say that some of these suggestions appeal to him. In any case, if this debate serves no other useful purpose I trust that the activities of these "spivs" of the house agents profession will receive sufficient publicity to warn people of what is likely to happen if they allow themselves to be drawn unwarily into this particular web.

§ Lieut.-Colonel Marcus Lipton (Brixton)
This is not a party matter and the House is indebted to the hon. and learned Member for Ilford, North (Sir G. Hutchinson) for raising this subject, although at a somewhat inconvenient hour for most Members. I agree that something ought to be done as quickly as possibly to deal with what is a growing abuse. Reputable 690 agents are becoming increasingly disturbed by the sharp practices used by mushroom firms.
What happens is that these wretched fee-snatching firms advertise by cards, in windows of shops in the suburbs, for which they pay sixpence or one shilling. The card gives a statement to the effect that a flat is available at 30s. a week and for further details one should apply to a certain name and address. A person doing this finds one of these fee-snatching agencies and is required to pay a fee of two guineas at least, if not more, in return for which he is given the address of a flat to inspect. The rent required is much larger than the 30s. advertised and a fantastic sum is required for fittings and furniture.
A constituent of mine who came to me the other day said he went to an agent and said that as he had not been able to provide him with the kind of accommodation advertised he wanted his money back. The agent refused. The only advice I could give my constituent was to take out a summons in the county court for the return of his deposit of two guineas in the hope that the agent would think it better worth his while to return the money than subject himself to the public exposure which would come his way if he contested the case in court.
Reputable estate agents have, through professional organisations, been considering the problem and the other day the South-East London Branch of the Incorporated Society of Auctioneers and Landed Property Agents held a meeting at which the main topic was the question of how to protect the public.
I know that this problem bristles with difficulties, and although on other occasions I have expected the right hon. Gentleman to provide solutions for problems that I have brought to his notice in a twinkling of an eye, I do not expect him to provide a ready-made solution for what is the growing problem of the exploitation of innocent people by unscrupulous men who are cashing in on what is a very great social need. But I do hope the right hon. Gentleman will be able to indicate that this is a problem which is known to him, that he is considering it, and will perhaps be able to say that in the not too distant future he may be able to make a contribution towards solving it.

§ The Minister of Housing and Local Government (Mr. Harold Macmillan)
I am grateful to my hon. and learned Friend the Member for Word, North (Sir G. Hutchinson), for raising this matter, which is of considerable importance. But I hope we may not exaggerate the degree of this problem. Indeed, I am a little surprised from the information given to me that there have not been more actual complaints because, of course, so poignant a need as the shortage of housing opens the door to fraudulent or semi-fraudulent behaviour of this kind. However, great or small, we ought to try to do everything we can to stop it and my hon. and learned Friend's action in raising the matter is of great assistance to us.
What can we do? Some of these actions may be fraudulent. In that case prosecutions could be launched, and any information which can be given to me, my officers, or local authorities ought to be given. It would be a great help if a successful action of that kind could be taken. Some of it is fraudulent in fact—although perhaps not in law—wicked but not illegal, like a good many things.
Now I come to the parlous edge of order beyond which I must not stray, and I must not deal with the question whether they can be made illegal. If we have to define what is an illegitimate sphere of operation we must define a legitimate sphere of operation, and it is there that the work of the professional societies can be of the greatest use. They can build up a great tradition of practice and rules of practice, which, perhaps, in one way or another, may some day become enforceable, either by public opinion or by law. Meanwhile, to bring to the public notice these matters, to try and warn the victims of them, is a most worthy and useful act, and I am grateful to my hon. and learned Friend. I will do everything 692 I can to assist him; I think there are some useful things going on at the moment which may develop.
My hon. and learned Friend has helped to advertise, and give publicity to, this matter. I think he has been fortunate on this occasion because so often Adjournment debates fade into the night. He has had an opportunity of getting into the afternoon and evening newspapers through this debate and I hope it will be so reported with the object he has in mind and which, I think, all Members have in mind. I see the right hon. Gentleman the Member for South Shields (Mr. Ede), a former Home Secretary, sitting opposite. It is very good of him to be here on this occasion. If he could help me in any way I would be happy to receive his aid, so that we could together help to bring this scandalous misuse of power to an end.

§ Mr. Ede
The right hon. Gentleman said that this matter could be brought to the attention of the local authorities. Does he know whether local authorities have any statutory powers, so that they can assist persons who have been fraudulently treated in these matters? There is a difficulty where a person goes to a local authority and finds that they have no power to intervene or help.

§ Mr. Macmillan
The local authorities are in touch with these matters and complaints made to them or to me could be taken to the police with a view to launching prosecutions. Local authorities, through their officers, have a good deal of information which might be used for the launching of prosecutions in the normal way against anything that could be held to be fraudulent.