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Government reveals letting agents' mandatory qualification and code of conduct

The government has this morning - Easter Sunday - announced a crackdown on rogue letting agents in the shape of a mandatory code of practice and the introduction of a nationally-recognised qualification. 

It says criminal charges will be brought against those letting and managing agents who break the code; a new regulator will be set up to police the code, and agents who fail to comply will not be permitted to trade.

Agents failing to comply will be barred from trading, while those who commit serious code breaches will face prosecution.


The government’s announcement this morning reads: “With thousands of renters and leaseholders suffering at the hands of rogue agents every day from unexpected costs, deliberately vague bills or poor quality repairs, a new mandatory code of practice is proposed to stop managing and letting agents from flouting the law.

“To further professionalise both sectors, letting and managing agents will be required to obtain a nationally recognised qualification to practice, with at least one person in every organisation required to have a higher qualification.

“A new independent regulator responsible for working practices of agents will be given strong powers of enforcement for those who break the rules – and agents who fail to comply will not be permitted to trade. Criminal sanctions could also be brought in for those who severely breach the code.

Housing minister Heather Wheeler says: ‘Most property agents take a thorough and professional approach when carrying out their business, but sadly some do not. By introducing new standards for the sector, we will clamp down on the small minority of agents who abuse the system so we can better protect tenants and leaseholders who find themselves at the end of a raw deal.”

Other proposals to be brought in under the code include:

- a new system to help leaseholders challenge unfair fees including service charges;

- support for leaseholders to switch their managing agents where they perform poorly or break the terms of their contract;

- a requirement for all letting and managing agents to undertake continuing professional development and training. 

The new code will be developed by a working group comprising representatives of letting, managing and estate agents, as well as tenants and regulation experts. The government says the group will be established as soon as possible and is expected to draw up the final proposals early next year.

The group will also look in greater depth at unfair additional charges for freehold and leaseholders and whether they should be capped or banned. This includes the use of restrictive covenants, leasehold restrictions and administration charges.

The government has also published its response to its consultation on the introduction of mandatory Client Money Protection schemes for letting agents, with legislation to be brought forward to introduce privately-led schemes and civil penalties of up to £30,000 for agents who fail to comply with the scheme.

The government says that according to industry estimates, £2.7 billion in client funds is held by letting agents at any one time. 

“Making this scheme mandatory is vital to ensure every agent is offering the same level of protection, giving tenants and landlords the financial protection that they deserve, and will mean they are reimbursed if their letting agent is fraudulent or goes bankrupt” says the government’s statement this morning.

The announcement has been welcomed by David Cox, chief executive of the Association of Residential Letting Agents. 

"We are hugely supportive of these proposals. After 20 years of campaigning, the government has finally listened to our call for proper regulation of the industry. For the last two decades, successive governments have passed significant amounts of complex legislation on landlords; none of which have been properly policed or adequately enforced” claims Cox. 

“These announcements demonstrate a very sensible shift towards focusing on the root cause of the issues affecting the sector rather than trying to find legislative solutions to individual problems. For landlords, their rental property is usually their biggest asset after the home in which they live; and for tenants, it’s their home” he adds. 

“It must be the right of every landlord and every tenant to have a letting agent who knows what they are doing, is professionally qualified and the money they entrust to their agent is protected. This is a huge step towards creating a level playing field across the industry, and we look forward to working with the government on this."

NALS also backs the measure, with chief executive Isobel Thomson saying: “We welcome the government’s recognition of the current contribution that lettings and management firms play within the Private Rented Sector. Creating a level playing field will eliminate the poor practice and dishonesty that currently tarnishes the sector and ensure a safe and fair experience for tenants and landlords.

“NALS has consistently called for regulation and unreservedly supports the Government’s announcement of its intentions and strategic goals. Agents who already submit to self-regulation should have nothing to be concerned about.

“NALS will continue to be at the forefront of discussions over the government’s route map.”

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    • 01 April 2018 06:02 AM

    Please do not forget about lease management companies, they also hide behind the scene for very long time to overcharge the service charge; force the things through without a proper voting procedures; making difficult for leaseholders to change the lease management company to run the management; they use their company account to hold the singing fund; they bully the leaseholders because some of the old folks among the leaseholders are having business connection with them...etc. We have got to stop those rogue companies both letting agents and lease management companies, not only penalties, you need to take away their license for at least 6-12 months to really give them a warning...penalties? Rich business do not care about penalties! They bully others to survive.

  • Simon Shinerock

    Massive change ahead, hopefully this will turn out well and not get twisted into a bureaucratic nightmare that serves no one. On the other hand it could be a prank, in which case the give away is the requirement for at least one person to have a ‘higher qualification’

  • Don Holmes

    At last.
    I have been around since long before the introduction of Accreditation, said then unless it has teeth it will not work. The same applies here, it is Okay spouting big fines, but unless it is fully policed by an independent body and monitored, at least as an annual licence it will fail in its primary duty.

    Good Luck we look forward to working with it.

  • Fed Up Landlord

    Simon don't hold your breath. Whilst the proposals are sensible then knowing this government's penchant to beat up agents and landlords at every turn then I fear it will.

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    I guess this is some form of an April fool’s prank!

    Simon Shinerock

    On balance I think you could be right, it’s in The Times and other papers as well though, hardly a subject that would prank most people you’d think

  • Vanessa Warwick

    The Government has certainly been busy this weekend!

    We have posted news of the new Rental Home Register on Property Tribes.

    Simon Shinerock

    Very funny

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    • 01 April 2018 15:12 PM

    I think everyone needs to get a course and certificate to be honest, ethical, too may liars and twisters,
    in some towns and cities. We fell on even some reputable letting agents did not follow honest business practice especially in lettings. Still, many many many agents have not joined the Redress Scheme.

  • Mark Wilson

    The biggest prank is how many of us seem to want more and more unenforceable regulation!

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    I can see trouble coming, assuming this is a seriou proposition. Remember house sales reform and the Home Information pack? Then being a Chartered Surveyor was not good enough to allow one to prepare the Home Condition Report. You had to re-train and spend lots of money on course fees and registration (and then lovely, clueless Yvette Cooper binned the whole scheme). This proposal opens the door to a great new money making venture for someone. You can bet your boots that those of us who are qualified and take the trouble to do CPD etc will be classified as useless and will have to pay in order to continue to trade.


    Well said - and true.

  • Fed Up Landlord

    Will we have to pick up a burning brazier with our forearms and sear "UKLA" or "ARLA" into them to prove we are "worthy"? ( Courtesy of David Carradine for those that remember it)

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    Most of the letting agents I encounter now are still way, way behind when it comes to legal and management procedural knowledge. They all think they know it all, and they don't. I am a graduate in Property Management and although I only use it occasionally now for my own properties I still endeavour to gather as much knowledge as I can.


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