Despite the continuing spate of cases whereby letting agents have collapsed with black holes in their accounts, housing minister Grant Shapps has once again rejected the idea of regulating the industry.
Shadow housing minister Jack Dromey asked him whether he planned to ‘bring forward proposals for regulation of lettings and management agents’.
But in his reply, Shapps suggested that there was already sufficient voluntary regulation.
He said: “Between a third and a half of agents belong to bodies offering voluntary regulation.
“These include trade body or accreditation schemes such as the Association of Residential letting Agents, the National Association of Estate Agents, the National Approved Letting Scheme or the Royal Institution of Chartered Surveyors, and ensure that their members have the right protections in place and operate to certain standards.
“They also have redress systems if something goes wrong. At the same time, the industry-led initiative, SAFEagent, which was launched last September, provides a simple to recognise logo for consumers.
“In view of the existence of these schemes, I do not think that the time is right for Government-imposed regulation of the sector which would run the risk of increasing burdens and costs and, therefore, reducing supply and forcing up rents.
“The last administration’s imposition of Home Information Packs is a prime example of how excessive state regulation and intervention can harm the interests of consumers.”
Recent cases this year have included that of Canterbury agent Joseph Newman which went into liquidation owing £413,321, of which liquidators Fisher Partners say that around £350,000 is owed to landlords and tenants.
Comments
Ray is right, Government intervention, especially handed to the LA to administer, would be counter productive to the industry.
We have to find a way to make self regulation work so everyone is singing from the same sheet, and that can only happen if the 'regulatory bodies' we have; ARLA, NALS, NAEA, TPOS etc all start talking to each other rather than sniping at each other.
And the only people who can make that happen is the agents themselves; if we could only be bothered to start thinking about the industry for 10 minutes instead of ourselves.
@London Joe on 2012-07-18 10:38:39
The same type of LA as the one that couldn't sort out its own EPC's?
In my opinion getting the Government or LA's involved in any business is asking for troubles
I think an easy interim solution for the government would be to make it mandatory to be part of ARLA/NAEA/RICS which would be governed by the local authorities.
Shapps is spineless and doesn't have a clue about the property market. I personally think he is a liability to the property sector
You know why agents go to the wall?
Because landlords and tenants fail to monitor what is going on when problems first reveal their ugly head.
Both are too trusting and "assume" that everything will be okay. Both fail to look for information that stares them in the face from the internet if they only would use it.
In other words they don't help themselves often enough. They only start to tlearn about the mistakes when its too late.
I still think Grant Shapps is wrong.
In my opinion Mr Shapps is quite right.on this.
Banks, Accountants, Solicitors, Insurance Companies etc. etc. are quite heavily regulated - they still have some members who have engaged in serious criminal activities. Some form of compulsory basic insurance protection for clients against loss would seem to be the only effective regulation to provide protection. Possibly, in the name of fairness between large and small firms, based on each property when instructed? Although there would obviously be a cost to the firm if all had to have it one would expect the cost to be reasonable?
Needs some fine tuning! ;>)
As much as I would like to see the cowboys gone from the industry, and welcome any step in the right direction to prevent people from losing out, is government regulation going to be the answer?
For starters, they won't listen to the industry to find out what is needed, they would just set half a dozen civil servants to work in the hope they come up with something, like the HIP's fiasco and deposit legislation. The cost of government legislation would be burdensome to all but the biggest players.
And even if they got it right, would it stop it happening? Probably not. Solicitors are heavily regulated, they go bust and take their client funds with them. The banks? that speaks for itself.
The problem, Mr Shapps, is that while between two thirds and half of UK letting agents are not members of professional bodiesor licensed agents, the unregulated agents are the ones that can dramatically cut their commisison and administration fees simply because they don't have the huge financial burdens that Licensed Agents have and they don't have to comply with any regulations!!!!
That puts all properly trained, regulated and Licensed agents at a distinct disadvantage when they are pitching for new business! These days landlords and tenants are very cautious about spending money and getting a bargain fee deal from an unregulated agent is very tempting. Those of us who pass the exams, pay the professional association fees and achieve the highest industry standards have to slash our fees or lose to the unregulated agents.
Please can we have a level playing field?
Just how many estate agents not doing lettings have collapsed?
The number of agents going splat in the rental sector are small and this needs to be got into perspective.
All business sectors suffer a collapse of some parts of it and (I will wash my mouth out with soap and water as I never thought I would support this twit) Shapps is correct in not agreeing to license agents.