Regulating the lettings sector – will it ever happen?
“It will be a while before light-touch regulation becomes politically acceptable again,” was the quote pulled out from a recent City Comment column by Anthony Hilton, one of the City’s most highly respected business journalists, in the London Evening Standard.
OK, full disclosure: Mr Hilton was reporting about the response from the Department of Business, Innovation and Skills, headed by Vince Cable, to Professor John Kay’s recent examination of the stock markets.
So, nothing to do with the lettings sector. Or is it? Let’s go back to the start: “It will be a while before light-touch regulation becomes politically acceptable again.” Really? Well, that is interesting, because in the case of the lettings sector, light-touch regulation would be a huge leap forward from where we are now.
The RICS, and Peter Bolton King, its global residential director, has led the latest charge on the sector’s efforts to, yet again, seek Government help in establishing effective regulation, the lack of which has, in their words, ‘allowed the lettings sector to become the property industry’s Wild West’.
In his most recent blog on the RICS website Mr Bolton King says: “There is clearly a lack of effective regulation of the letting sector. RICS is not calling for more regulation but simpler and more targeted regulation. It is currently possible for anyone to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process. In addition, it is not compulsory for agents to conform to any code of conduct, provide safeguards or register with a government-approved redress system. As the private rented sector continues to grow, this is becoming an increasingly important issue.”
I, for one, agree with him. And I’m sure everyone who attended VTUK’s roundtable dinners in 2009 and 2010 (and it’s worth noting that attendees included Ian Potter, Lord Richard Best, Bill McClintock and Isobel Thomson) on this precise subject does too.
The reason I can say that with such confidence is that the overwhelming conclusion drawn from both these debates was that the sector needs Government assistance to force those who do not adhere to industry imposed professional standards to toe the line.
It’s very important to remember that the sector has taken great strides over the past decade to improve professional standards. As a whole, we should applaud ourselves; we deserve a pat on the back. Yet, as Mr Bolton King says above, it is still possible for anyone to set up a lettings agency without appropriate qualifications, knowledge or understanding of the rental process.
Let’s be brutally honest – we’ve achieved nothing. The good eggs, who had always acted professionally, have joined one of the numerous industry schemes, are qualified, train their staff members and do things right. The bad eggs – well, they’re just going rotten, because they can.
It has long puzzled me why the Government has made no effort to enforce some form of regulation. After all, all it would take is a tweak – join ARLA / NALS / RICS (delete as appropriate) and abide by their Code of Practice.
I heard it first hand when Grant Shapps, then shadow housing minister, joined us as our guest of honour at the roundtable dinner in 2010 that I referred to above.
At the dinner, Mr Shapps outlined that he felt that the PRS was doing an effective job of self-regulation and that he saw little prospect of formal regulation being introduced to the industry. Mr Shapps made the point that the housing minister’s responsibilities are vast and he saw his key focus, if appointed, as being to introduce housing and planning regulation aimed at increasing house building activity.
He also pointed out that any incoming Government, given the current economic position and national debt, has an exigent task and introducing legislation for any industry is highly unlikely.
So there you have it. Lettings regulation. We all think we need it. We all want it. We’ll continue to campaign for it. And I think it remains highly unlikely we’ll get it.
However, if regulation is something that you feel passionate about, then you should be aware of, and respond to, the ongoing DCLG Select Committee inquiry into the private rented sector.
Together, I believe we can make a difference.
Details of the inquiry are here:
* Peter Grant is managing director of VTUK, an independent property software company
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