UK property lettings agents to be regulated for the first time
Lettings agents in the UK are to be regulated putting them on par with estate agents in a move that is the culmination of vigorous campaigning by the property industry.
Professionals have welcomed the news that an amendment to the government’s Enterprise and Regulatory Reform Bill proposes that for the first time lettings agents will be regulated.
A new ombudsman will be created with the power to compel lettings agents to repay tenants and landlords that it finds have been unscrupulous.
Until now, many agents who let property have been able to operate totally unchecked, with consumers having no way out should they fall foul of malpractice or unethical behaviour.
The bill will require that all lettings and management agents sign up to a redress scheme. This means that unsolved grievances with agents can then be referred to the new ombudsman.
The Royal Institution of Chartered Surveyors (RICS) which has been at the forefront of the campaign for regulation, welcomed the news but global residential director Peter Bolton King said there is still a long way to go.
He pointed out that whilst the change to the law will give landlords and tenants much needed access to recourse in the event of poor practice, it only offers the consumer support after the damage has been done.
‘This is a step in the right direction, however there is still more to be done to raise standards in the market and protecting the consumer throughout the transaction. The lettings market has for far too long been in danger of becoming the Wild West of the property industry. While clearly there are good agents out there, the market has been dogged by poor practice and a lack of consumer protection,’ he explained.
‘Now should a tenant or landlord experience problems due to poor service they will be able to register their grievance with and independent redress scheme which will, if appropriate, investigate and award compensation,’ he added.
Bolton King that on top of this RICS would like to see lettings and managing agents required to sign up to a professional regulation scheme that would ensure a better standard of professionalism right across the sector. ‘We still think there is a very strong business case for better targeted regulation and we are working with the government to that effect,’ he said.
The British Property Federation also welcomed the news, calling it a step in the right direction, but added that it too believes it does not go far enough.
‘There are still issues on the table. We should not kid ourselves that this will expunge the sector of bad letting agents. For example, we will continue to campaign to have client money protection insurance extended so that money paid over by landlords and tenants is accounted for and not at risk,’ said policy director Ian Fletcher.
But the National Association of Lettings Agents said that it was glad that the government had not been too heavy handed. ‘We believe this is a sensible alternative to the heavy handed bureaucracy of a formal regulatory regime which we believe would lead to increased rents for tenants and ultimately stifle entry into the market,’ said NALS chief executive Isobel Thomson.
‘All NALS agents under our strict registration criteria are required to be part of an ombudsman scheme. NALS believes that the introduction of mandatory membership of an ombudsman scheme is the first step, and there is more industry organisations can achieve,’ she explained.
‘We need to work collaboratively for the interest of the consumer on initiatives such as the SAFE agent campaign to raise awareness among consumers of the protection they are afforded by using an agent who is part of a Client Money Protection Scheme,’ she added.
Chris Norris, head of policy at the National Landlords Association (NLA) said that the proposals for regulation will provide the best means to ensure that landlords and tenants who choose to use professional letting services receive adequate protection.
The UK Association of Letting Agents also welcomed the move. ‘At UKALA, we have long been of the opinion that a bespoke solution was needed to address the issue of accountability and transparency within the lettings sector and that a poorly devised regulatory approach could do great damage to the sector at a time when it’s growth is essential to providing a healthy housing market. We must not forget that the vast majority of letting agencies are small and medium sized businesses which will face greater hardship complying with additional burdens,’ said UKALA executive Caroline Kenny.
‘UKALA is committed to ensuring that tenants benefit from a wide choice of quality property and that properly trained, professional letting agents are poised to deliver this level of service to the consumer. We therefore look forward to the forthcoming consultation period and working closely with our membership, the industry and government in the development and implementation of future bespoke letting agent regulation,’ she added.
Article courtesy of Property Wire