July round up of the Private Rented Sector
The exceptional weather we have enjoyed during July may be coming to an end, however the momentum on discussing potential regulation of the lettings sector has not cooled.
With the recent ruling by Government that all letting agents must “belong to a recognised redress scheme”, the beginning of July, seen the introduction of a new scheme that would allow “all letting agents … to get Client Money Protection, whether or not they are members of a recognised trade body or association.” Closely followed by another scheme that would provide both Client Money Protection and Professional Indemnity insurance, but only to members of one of the ombudsman schemes, TPO. With speculation that it will not be long before CMP is a minimum requirement for all letting agents, these schemes allow agents to demonstrate to clients that they are a well run professional agency.
Labour MP for Hyndburn, Graham Jones, put forward the argument this month that Councils must gain more power to raise standards in the private rented sector, and an effective way for them to do this would be through selective licensing schemes. However, a poll of landlords by Paragon Mortgages revealed that 74 per cent think selective licensing will deter new landlords if it is ever introduced nationally.
The strongest call yet for regulation of letting agents also came this month from a report from the Communities and Local Government select committee, which proposed bringing regulation for letting agents up to the level of that for estate agents. The CLG committee proposals would give the Office of Fair Trading power to ban letting agents, just as it can ban estate agents. The proposals, if adopted, would also make both Client Money Protection and Professional Indemnity insurances a mandatory requirement right across the industry. In regards to letting agents fees, which were questioned this month in the House of Lords, the committee proposed a Code of Practice that would require agents to publish a full breakdown of fees charged to tenants “alongside any property listing or advertisement, be it on a website, in a window or in print”.
This report from the Communities and Local Government select committee, has been welcomed by Which?, ARLA and NALS, all of whom have expressed that they hope the Government will act upon the recommendations as soon as possible. However, with the Government now in its Summer Recess to September, no action will be taken for the immediate future.