The first cracks are finally showing in the Government’s opposition to the regulation of letting agents, while Boris Johnson appears to have done a U-turn on his earlier stance.
Until now, the Government has steadfastly declared that it does not want any red tape in the sector, and that self-regulation is enough.
But next week, on April 16, MPs are due to debate an amendment made by the House of Lords to the Enterprise and Regulatory Reform Bill, calling for letting agents to be brought within the scope of the Estate Agents Act 1979.
The clause, proposed by Baroness Hayter, only just scraped through in the Lords, and there has been little indication that the Government would do a U-turn on its previous stance – despite risking embarrassment to housing minister Mark Prisk, who proposed regulation of letting agents when he was in opposition.
But now a spokesperson at the Department for Communities and Local Government has said: “We continually work with industry and regulatory bodies to improve the system. However, we recognise that the lack of redress against some letting agents is a real concern for many landlords and tenants. Government is currently looking at this issue and giving it serious consideration.”
The spokesperson was responding after ARLA, RICS, Which? and Shelter wrote a joint letter to Prisk and Jo Swinson, consumer affairs minister, urging them to accept the new clause.
The letter said: “It would be a huge missed opportunity not to enable the OFT or its successor bodies to ban or reprimand rogue agents, or to deprive tenants or landlords who suffer poor treatment at the hands of letting agents with access to independent redress.
“We believe these changes do not equate to a burden on business but rather a minimal regulatory necessity.”
Meanwhile, those campaigning for the regulation of letting agents are not letting up.
The RICS is urging its members to join a letter-writing campaign to business secretary Vince Cable.
The RICS wants its members to write to Cable about their “personal experiences of why the lettings sector needs reform”. It has produced a template for them to use.
The RICS has told its members: “There is a real opportunity for members to help influence government.
“Achieving better regulation of the sector and eliminating the ‘cowboys’ will ultimately deliver more and repeat business for members and a better deal for consumers. The letter will only take 5-10 minutes to complete and your efforts can play a key role in RICS’ campaign to better protect the consumer and raise standards across the lettings sector.”
The amended clause proposes to:
• Extend the scope of the Estate Agents Act to letting agents, giving the OFT powers to ban lettings and managing agents
• Require all letting and managing agents to have clear and free consumer redress mechanisms in place
• Stop sales agents who have been banned by the OFT from being able to set up as a lettings and/or managing agent
See also next story for Boris’s change of mind.
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Comments
There will be another letting agent in the news shortly who has just run off with landlords money and tenants deposits based in Croydon
They were members of the TPO until recently
First things first please. There is an overwhelming need to regulate all the bodies who want to regulate lettings agents. These would be expert people and their so called expert opinion groups are running amok and causing untold problems for the property industry.
Collectively they are causing confusion and uncertainty, causing investors to keep away from the private property market. This will ultimately hit investors and reduce the number of properties available for let.
I forgot to add that the tenants will have to pick up the bill.
What is the point of regulation when those with the power to regulate fail to regulate?
There is very clear evidence that those who should be guiding the industry are no longer doing so and seem incapable of leading without a big legislative stick.
Regulation of all Agents will simply muddy the water and make it unclear to the public who is good and who is rogue.
If I were in charge of either RICs or ARLA I would be making it very clear that, through strong governance, my member agents stood head and shoulders above those at the bottom end of the market.
I think what Government, Councils and all those calling for change have failed to recognise is diversity of demand. Ranging from beds in sheds to £30,000 per week mansions in Chelsea. Every single property is a home that fits the circumstantial budget and in order to cater for that diversity there will be appropriate levels of agent.
Regulation will not level the social playing field and it is a fool’s mission to try.