I write this article on the day of the General Election so you’ll forgive the political analogies. In particular, how any future Government might look to engage itself in the housing market in general, but particularly the work of agents, and of letting agents in particular.
Clearly at this stage I have no idea who has won; today’s and recent paper’s predictions being there will no outright winner and it is still unknown who will be walking into Number 10 as Prime Minister. Instead I am more interested in what has preceded today and what might be coming for our sector over the course of the months and years ahead. We can be pretty confident more change is looming, perhaps from both a legislative and regulatory perspective and therefore my view is that agents need to expect some turbulence.
This has been a General Election crusade which has focused more on housing than any other campaign in recent memory. We would probably have to go back to the 1980s and Margaret Thatcher’s flagship Right to Buy policy to find a period when the housing market was deemed such a crucial vote-winning topic. Of course, over this campaign, we have had the Conservative’s resurrecting Right to Buy for housing association tenants but it is perhaps the policy proposals of the opposition parties which have signalled a far more active approach, particularly in the private rental and lettings arena.
Labour in particular attempted to appeal to ‘Generation Rent’ with proposals for prohibiting or significantly constraining letting agent fees, three-year tenancy terms, rental caps linked to CPI, plus a policy to give local first-time buyers access to new-build developments before landlords. There’s no doubting that Ed Miliband also saw plenty of political mileage to be had from a suggestion that letting agents were uniformly ‘ripping off’ tenants by charging ‘extortionate’ fees.
To that end, he might like to study a recent survey of tenants across the country which revealed their number one concern was the cost of renting (51%), while this was followed someway behind by the quality of the accommodation they were living in and agents’ fees (both 12%). After this came the large deposits required (7.3%) followed by future rent increases (3.1%).
So, while fees are clearly a concern, they are nowhere near as far up tenant’s list of priorities as the cost of renting itself, and even future rent increases seem much less of an issue than many politicians in particular might suggest. One wonders therefore if politicians have been looking at the wrong problem here – the principle cause of most of the housing problems in the UK come down to one simple facet– a lack of supply both for homeownership and renting. Until we adequately tackle this problem then most of the symptoms of a housing shortage will remain, irrespective of any regulatory or political interference. After all, demand will not significantly recede so we must consequently concentrate on the supply side of the equation to solve the conundrum.
That’s not to say that agents should be beyond the scope of change. After all, most agents relish the opportunity to mark themselves out from an incredibly crowded marketplace. Regulation of agents is often an issue raised – principally because the absence of end-to-end statutory relation seems odd to consumers. Certainly from our Century 21 perspective, there is nothing for quality agents to fear from increased regulation – indeed, most might welcome it if standards are improved and it helps weed out the cowboys. At the moment, we are still in a position where every man and his dog can set up as an agent and, when things inevitably go awry in these establishments, the reputation of the wider industry is tarnished.
So, let’s not fear future regulation – we might have no choice but to embrace it and it will surely result in a much more focused, quality and service-driven sector devoid of the ruthless and incompetent rip-off merchants. That is certainly a ‘price’ worth paying for its introduction. In this marketplace, operating under the radar is no longer an option – the spotlight is too bright and instead of agents shying away from this, we should embrace it and take our place centre stage. If this Election has taught us anything, it is that the scrutiny we are under will not diminish, so let’s make sure we respond positively to whatever may be coming our way.
*Rob Clifford is Chief Executive of CENTURY 21 UK, part of Shepherd Direct