The Labour Party has come up with a policy review on private rented housing – but despite making a lot of noise about ‘unscrupulous letting agents’ and ‘rip-off charges’, it stops short of introducing licensing as a policy.
As such it has walked away from the policy it had in government, when it broadly accepted the Julie Rugg report, which proposed a registration scheme for all private landlords and mandatory licensing of letting and managing agents.
Although Labour’s policy review does not totally rule out licensing, the document – which estimates that over 4,000 managing and letting agents are entirely unregulated – effectively lets the Rugg report continue to gather dust on the shelf.
Instead, Labour will work with the industry on developing solutions.
The policy review document, which describes the lettings market as ‘broken’, notes: “It is a peculiarity of current policy that while estate agents, who hold very little money on behalf of their clients, are regulated, letting agents who hold significant sums on behalf of landlords and tenants are not.”
It says that one barrier “is the operation of the unregulated lettings market where too many unscrupulous lettings and management agents act in their own short-term interests.
“This means that tenants and landlords do not get a fair deal and the many responsible agents are undercut and their reputation undermined.
“The majority of letting and management agents provide an important service and act responsibility, but too many others are engaged in unscrupulous practices.”
The report also notes that anyone can set up as a letting agent, with no qualifications whatsoever, and no need to conform to any requirements as to conduct or to provide safeguards. Nor are letting agents obliged to register with a redress scheme.
Nor is there anything to prevent owners of companies that have gone bust while holding client money from subsequently setting up again.
All this means that letting agents, unlike estate agents, can operate outside any legislation.
This, says the report, allows unscrupulous letting agents to flourish: “Labour believes we should take steps to stop irresponsible agents operating and end the scandal of rip-off fees.”
The report quotes from the likes of ARLA, Countrywide and the Residential Landlords Association, all of which call for regulation of agents.
However, the report ends by saying: “Labour has been listening to these calls for action as part of our policy review and we have been looking at how we could deliver real change and fairness in tough times.
“We will consider different models to improve standards and practices in the private rented sector, with the goal of creating a level playing field for the many responsible operators and basic protection for tenants and landlords.
“We intend to work in partnership with the sector to develop solutions, and will look at potential measures including a code of code of [sic] conduct with entry requirements for letting agents and compulsory business and consumer protection measures. We will consider how compliance could be monitored, for example by a regulatory body with enforcement powers.
“We also want to end the confusing, inconsistent and opaque fees and charges regime.
“We will work with the lettings industry to achieve greater transparency, clarity and accessibility of information relating to fees and charges. We want to see a regime where fees and charges are easily understandable, upfront and comparable across agents.
“We will assess the level and extent of activity that can be charged for, including the size of deposits required in proportion to rent and the level of ‘administration’ fees for basic services, such as those for swapping, renewing or editing contracts.”
For reactions, see the next story.
%20(002).png)
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
.jpg)
Comments
@denise
don't worry,landlords will be taking anyone with a pulse and paying all fees as incentive when the housing market burst goes into full swing
ftbs will be buying the liquidated portfolios of landlords,so there will be no-one left to rent property after prices fall 30-50% and more for flats
btl returns about as much in a savings account net,thats if you buy cash!
@R C. I have had the same happen to me and landlords who do not want to spend the equivalent of less than a pound a month for an EPC will always go to the cowboys. You can never win with these people and the cowboy agent then puts in a DSS tenant from hell and dont give a rats.
What you can do however is tell the local trading standards officer when it is let and leave them to do the dirty work. Hey presto cowboy could be out of business!
Look on the web site to see if there is one there first though.
@ Stonhenge
In a nutshell! Thats exactly what happens. I went to a house on Wednesday for a valuation. Landlord has already given the house to another agent but wanted a second valuation. Wasn't remotely interested in CMP or regulatory bodies, just in what we would charge.
When I asked about his EPC he said he didn't have one; when I pointed out he needed one to be able to market the property he said the other agent (unregulated, working from back bedroom at home) told him 'there are ways around that' and 'not to waste his money' He then tells me the guy is doing it for 5%!!
The other agent will fail and we'll get tarnished along with it.
When the first question landlords ask is "what is your monthly management fee" or "what is your let only fee" or words to that effect is where any interest in the regulation of an agent ends.
Landlords never ask about experience, qualifications, ARLA, or anybody else for that matter. All they want to know is:
1. How much do you charge?
2. How soon can it be let?
3. What's the best rent you can get?
The questions they should be asking:
1. Are you Regulated?
2. How long have you been established
3. What is your personal involvement in the lettings industry and how long have you been working for this company.
If that were to change then the industry would be much better served.
Landlords are too lazy or ignorant to know what they should be asking an agent.
Self regulation does not work as you only have to agree to become regulated if you feel like it, and if you don't then so what!
@denise on 2012-07-19 09:15:28
May I respectfully ask you to stop shouting what, in my view, is mainly rubbish. Anything the government gets involved in is usually worse.
The word is NO.
All tenants and landlords have this in their vocabulary yet most are frightened of using the word.
Caveat emptor is as good today as it has ever been. Good education of landlords and tenants is needed and Shapps and any other housing minister are not going to do anything because they probably have no idea where to start or where to end up.
Hips was a fiasco and so too will bad regulations. If it comes into being there will the back room boys without a brain doing the usual government job of screwing up the system without consulting the industry.
@denise
The reason Shapps can't regulate is in no small part due to the mess 13 years of inactivity and neglect caused. There are many many independent agents with holes in their accounts who can simply magic cash to plug them.
Sudden regulation would cause a floodgate of closures. Self regulation and consumer education will hopefully reduce the risk hence Shapps support of SAFEagent. If landlords listen and shun the unregulated agents, then the risk will reduce and regulation will follow.
Labour have been quite possibly the worst party in opposition for as long as I can remember, they really are the nasty party!
I AM SPEECHLESS !! WHY WON'T ANYONE AGREE TO LICENSING? WHAT COULD POSSIBLY BE WORSE THAN THE PRESENT SITUATION?
IT WOULD BENEFIT EVERYONE EXCEPT THE UNSCRUPULOUS, UNREGULATED AGENTS WHO ARE MAKING LOADS OF MONEY OUT OF LANDLORDS AND TENANTS ALIKE AND, NO DOUBT, LAUGHING AT THE APATHY AND IMPOTENCE OF THOSE IN POWER WHO USE LOTS OF IMPRESSIVE WORDS BUT DO NOTHING ABOUT IT.
DOING NOTHING IS NO LONGER AN OPTION.
STORIES OF TENANTS BEING RIPPED OFF BY AGENTS ARE RIFE WITHIN THE INDUSTRY. IT HAS TO STOP AND THE GOVERNMENT MUST TAKE ACTION. MR SHAPPS - ALL EYES ARE ON YOU!!!!