ARLA has made it clear it will fight on for the full regulation of letting agents.
Ian Potter, ARLA’s managing director, gave a politely muted welcome to this week’s last-minute amendment by the Government to overturn a move by Labour peer Baroness Hayter to bring letting agents within the scope of the Estate Agents Act.
Instead, housing minister Mark Prisk pushed through proposals for mandatory membership of an ombudsman scheme – something that will require secondary legislation in due course.
In doing so, Prisk has firmly rejected lobbying from the likes of ARLA and the RICS which called for full regulation.
Potter said: “The Government’s amendment to the Enterprise and Regulatory Reform Bill marks a positive move for the private rented sector, and in particular for consumers, who only stand to benefit from a formal system of redress.
“However, it is vital that the Government begins the process of consultation quickly, taking on board the views of the sector, and moves to introduce secondary legislation as soon as possible.
“ARLA will continue to push for regulation of the private rented sector. This is a solid first step, but we must not lose momentum.”
Former ARLA president Lucy Morton, head of lettings at London agents WA Ellis, expressed her disappointment. She said: “Although this is a step in the direct direction, the Government has failed to address the issue of client money protection and professional indemnity insurance, which were both proposed within Baroness Hayter’s amendment.
“There is a still a long way to go in ensuring better standards across the industry, and I fear that without full regulation we’re stopping short of putting an end to rogue agents and bad practice.”
Property Ombudsman Christopher Hamer, who had supported Baroness Hayter’s overturned amendment calling for full regulation, took a similar stance.
He said: “Whilst full regulation is not yet on the agenda, the introduction of compulsory redress brings about a level playing field for the industry and it will mean that a consumer has access to independent dispute resolution regardless of which agent they use.
"I look forward to working with the minister as the Government consults on the introduction of the legislation.”
Others took a more welcoming stand. Lewis Shand Smith, chief ombudsman of Ombudsman Services, said he supported the new amendment.
He said: “Independent redress is a means of resolving complaints that is cheaper and quicker than the courts; it can help business to learn from their mistakes, and gives consumers confidence without imposing significant additional regulation on the sector.”
Caroline Kenny, of UKALA, said she was pleased the Hayter amendment had been overturned: “Whilst well intentioned, the previous proposals that letting agents be brought within the scope of the Estate Agents Act 1979 fell short of providing a genuine solution, and we are glad that the Government has decided to work with UKALA and others to ensure that future regulation is not only proportionate to consumer need, but also fit for purpose.”
She said that “a poorly devised regulatory approach could do great damage to the sector at a time when its growth is essential to providing a healthy housing market”.
She went on: “We must not forget that the vast majority of letting agencies are small and medium-sized businesses which will face greater hardship complying with additional burdens.”
* But isn’t redress tantamount to shutting the stable door after the horse has bolted? And should having client money protection insurance be as minimum a requirement for letting agents as a driving licence is for anyone getting behind a wheel?
See today’s blog by Malcolm Harrison.
Comments
'The house of ARLA, unable to regulate its own members'
Has an ARLA board director been in court for and had to pay compensation for disability discrimination?
ARLA have long since paid lip service when required to the topic of the day. Sadly when a proactive response is needed to address issues more directly affecting it members, let alone the industry, they mimic the actions of male genitalia on a cold day.
The house of ARLA, unable to regulate its own members whilst calling for the regulation of the industry in the hope of wearing the crown beggars belief.
A vote of 'no confidence' grows daily amongst us to the point of embarrassment but yet our subs keep rolling in, maybe the jokes on us?
Licensing:
Look at the ARLA site - they show a strap line of 'LICENSED' which gives the impression that the agent is nationally licensed - not just ARLA licensed. It is misleading.
Regulation:
ARLA are really pushing regulation - why?
It is my personal opinion that the main reason now is because they are a failing members organization and hope that they will become one of the 'regulation' bodies thereby increasing their income.
Good point Mr Proper. I know of "licensed" staff listed against "licensed" Arla Agencies on the Arla website who have left the said Agency years ago!!!
What procedures have Arla got in place to regulate their own members? If the answer is none how do they think they can be involved in regulating a whole sector?!
If anyone needs regulating its ARLA, a company I know with 10 branches has only one person ARLA qualified, so how can it show and ARLA symbol at each branch when ARLA rules state that a qualified person must be on each ARLA site.
It's a pity ARLA didn't decide to fight as hard to stop the ban on letting agent fees to tenants in Scotland which didn't even warrant a mention on their website.
In Scotland only about 30 out of 500 Letting Agents are ARLA registered.
I suspect that the push for regulation by ARLA is driven by a desire for "Empire building£ rather than a desire to improve the PRS.
Levelling the playing field is a daft idea for a competitive industry and the very last thing anyone wanting to address the problems caused by a minority of Agents incapable of operating honestly should suggest
Client money protection and redress schemes are worthwhile but only if they are effective and balanced in favour of the honest majority. This legislation change will provide a remedy for mal-practice but does not address the failure of the Industry governors to govern the industry.
RICS and NFOPP both have workable rules of conduct but very few have read them, less understand them and even fewer adhere to them. Delusional piety best describes what is going on and thank goodness Government recognise that the solution has to come from within. Perhaps this will motivate someone to do something!
It seems that the government's approach to regulation is more in line with UKALA's.