Steve Harriott Blog

I have spent most of my career in the heavily regulated social housing rented sector.

The Housing Corporation, Audit Commission, Tenant Services Authority and now the Homes and Communities Agency have all been regulators.

These agencies have some draconian powers if you fail to meet their regulatory standards – from fines to effectively closing down the business and transferring the homes managed to another housing association. 

So why has the Government been so reluctant to bring about regulation in the private rented sector?

In my view, there needs to be some sort of level playing field in the rented sector in the UK. 

It’s recognised that social tenants need the protection of regulation and it’s clear that tenants and some landlords in the private rented sector also need the same type of protection.

We have had direct experience of this with the shocking case of Premier Places (Redditch Letting) Ltd where the MD and accountant admitted to fraud, which led to the loss of hundreds of deposits as the two effectively stole their clients’ money. 

TDS paid out over £63,000 to tenants, and landlords may have been left without their share of the deposit money or any rent monies held by the firm.

What shocked me most about that was the sentence of just 250 hours of community service and a 12-month suspended jail term.

And now we have been involved in helping to pick up the pieces after the collapse of the Wilmslow agent Spencer Knight.

Luckily the management properties from that portfolio have been taken in by a well-known and respected ARLA agent, Lime Lettings, and these deposits have been re-registered with TDS.   

Until the courts start to give tougher sentences or the Government decides to introduce stronger regulation, then these cases are likely to increase. That’s not scaremongering, because every month we are dealing with cases similar to Premier Places and Spencer Knight. 

We simply have to have better protection of tenants’ and landlords’ deposits and rent monies. 

Regulated agents do have client money protection insurance and these agents recognise the benefits that this can bring in terms of consumer protection.

In an era when young kids get sent to jail for stealing a t-shirt, and MPs get imprisoned for fiddling their expenses, what makes these fraudulent lettings agents get away with a smack on the hand? 

These types of punishments will simply encourage those unscrupulous agents who want to cut back on fees and steal the clients’ money when things get tight. 

We have seen what happens with the banks when self-regulation was ineffective, but there is no sign of the Government wanting to regulate.

What we need is a nationwide alliance of regulated agents, the professional bodies, the ombudsmen and the tenancy deposit schemes to come together and agree a form of effective self-regulation that will really work and which can be brought to the consumer’s attention. 

Wasn’t this what the Property Standards Board was about? Perhaps it’s time to resurrect that idea.

Steve Harriott is CEO of the Tenancy Deposit Scheme