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TODAY'S OTHER NEWS

Countrywide and Connells want mandatory regulation of letting agents

A roundtable discussion of rental industry leaders has produced a recommendation for the mandatory regulation of lettings agents.

The objective, they say, would be to “eliminate unprofessional, unqualified and unethical agents from the property sector”.

The roundtable was coordinated by the the Nationwide building society. 

It includes representatives from Countrywide, Connells Group, the Association of Residential Lettings Agents, the NLA and RLA landlord organisations and the Nationwide. 

Also involved were the Nationwide Foundation, campaign group Generation Rent, and an organisation linked with Shelter - Fair Housing Futures.

A statement from the Nationwide says there was consensus on the need for greater trust in the sector, with the following steps agreed by all parties:

- Make tenancy documents easy to understand: Contracts should be easily readable, translatable and clearly and accessibly highlight the rights and responsibilities of tenants and landlords;

- Role of lettings agents: More should be done to ensure that lettings agents understand and facilitate the necessary regulation at play in the rental process. It was agreed that full mandatory government regulation of lettings agents is the quickest and most effective method to eliminate unprofessional, unqualified and unethical agents from the property sector;

- Improved, simplified sources of information: There should be a single point of contact for landlords and tenants where they can seek qualified, straightforward advice regarding their respective rights and responsibilities. Giving local authorities the resources to employ more dedicated Tenancy Support Officers was discussed as was the perceived benefits of a single information portal, replacing the current system where information for both parties is scattered across different Government and sector websites, where there is no standard benchmark of quality;

- A review of insurance products on offer in the sector: There is potentially scope for more use of insurance in the sector, particularly landlords’ insurance as a route to mitigating risk and building trust. Insurance products available to landlords should also be reviewed to ensure they do not contain restrictions such as “no DSS clauses”, and to ensure that they do not inadvertently trigger unnecessary evictions.

Other issues discussed - but which did not achieve consensus - include:

- A change in language. The current language used to discuss the private rental sector is outdated and has the potential to encourage stigma. Some took the view that use of new terms like ‘home provider’ and ‘resident’ could encourage respectful relationship-building between both parties;

- More effective regulation: Some attendees felt strongly that respect and trust could not be developed between landlord and tenant without a robust regulatory framework offering tenants protection from unfair eviction, and potentially recriminatory rent increases;

- Scrapping Section 21: Some present contested that Section 21 should not be scrapped, and that doing so would not necessarily resolve any of the outstanding issues within the sector, including property standards and tenancy length issues. However, others present argued in favour of scrapping Section 21 ‘no fault’ evictions in order give tenants increased security in their homes. Nationwide Building Society, Crisis, and Generation Rent all support scrapping Section 21, with Nationwide requested it is abandoned in tandem with the creation of a specialised housing court.

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    To try squeeze out more independents by any chance ?

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    Then get qualified, James B. It isn’t hard. And given peoples lives and huge sums of money depend on your conduct, why shouldn’t your work be checked by a regulator? Why shouldn’t you jump a small hurdle to demonstrate your competence? Ran a small independent regulated letting agency for 20 years; it’s not just do-able, but good for business.

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    Your assumptions are incorrect my business is part of a professional body, and I personally do not fear such legislation apart from additional work which we have enough of these days, but I do question the motivation of the corporates as I’m sure it is not for the benefit of the sector but more for personal gain

     
  • jeremy clarke

    Will only work if it includes landlords. I work as an industry trainer and cannot believe the knowledge gaps that I encounter when training private landlords, who often have many years experience.

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    What about countrywides let off ? Using £10,000,000 of tenants funds to prop up their business and get little fine. The rest of us would be shut down. We have been licensed for years and when my accountant said I was £0.42 adrift (interest charge) I got a compliance visit from ARLA! Which passed with flying colours and l Obviously then sacked accountant afterwards for not using common sense.

  • Paul Barrett

    It is clear that many LA are participating in mass lettings fraud.
    At no point do the vast majority of LA confirm that LL have CTL especially to HB claimants.
    They rarely check EPC compliance.
    LA regulation would require LA to check these things.
    Many LA source tenants for Accidental LL.
    Again CTL is rarely checked.
    The vast majority of Accidental LL are letting their homes out while there is a residential mortgage in place with rarely CTL being obtained.
    Such CTL if it is obtained usually lasts about 2 years at which point the homeowner is usually required to change to a LTB mortgage product.
    Very few homeowners would be able to do this plus they DON'T want to lose PPR status so they keep it quiet.
    As a consequence of this mass fraud there are too many available properties available for letting.
    There should be far fewer of them if they are to be legal.
    This would leave the legal LL able to charge higher rents as illegal rental stock would be removed from the market.
    LA are the effective pointman but there are currently no sanctions against LA who participate in LL fraud.
    LA regulation would force LA to check the status of the properties they take on and the legality of the LL to let and to what type of tenant or occupants are taken on.

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    It would be a lot easier to make landlords use professional agents and not to conduct in to tenancies. This would be less of a headache to the trade

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  • Paul Smithson

    Clearly this is to squeeze out the little man. Think about how useless ARLA was in their involvement of the tenancy fee ban, you might as well just pay your membership fees to the government.

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