Estate agency chain Leaders has called on the new government to bring in formal regulation of letting agents.
Chief executive Paul Weller said: “More people than ever before now use the services of letting agents.
“Yet the vast majority are unaware that letting agents are not regulated by the Government and that anyone can set up a letting agency, with no experience, knowledge of lettings law or Client Money Protection in place.
“Letting agents can hold hundreds of thousands of pounds in rent which they are supposed to protect.
“But without regulation there is no way to enforce this and there have been countless cases of letting firms losing their clients’ money, using it for their own ends, or completely disappearing with it, leaving landlords and tenants badly out of pocket.
“Too many people have suffered at the hands of agents like this, as well as incompetent and unscrupulous agents who fail to provide a decent standard of service.
“This needs to be tackled urgently and the only way to do so is to make it mandatory for agents to abide by an agreed code of conduct, be professionally qualified with a sound knowledge of the laws governing lettings and to have Client Money Protection and professional indemnity insurance in place.”
He said that only agents that are members of a self-regulating professional bodies, such as ARLA and RICS, sign up to a code of conduct.
Weller said: “The rest can get away with cutting corners, and as a result can often afford to undercut good-quality agents on fees to attract unwitting tenants and landlords.
“The new Conservative government has put forward some promising policies on housing which we believe will be good for the market.
“These include the promise to build 200,000 new homes which will be available at a 20% discount to first-time buyers under the age of 40, and the launch of a new Help to Buy ISA for first-time buyers which will enable them to save up a subsidised deposit to buy their own home.
“There is now a golden opportunity to make a positive difference to those renting and letting.
“Proper regulation is essential to stop rogue agents taking advantage of the thriving rental market.
“Good agents have been crying out for this for years and, as the numbers of those renting and letting continue to rise, the need for it grows ever stronger.”
The Conservatives have consistently said they do not want to regulate the letting industry further, having introduced compulsory membership of a redress scheme last October.
However, critics say this is too late and after the horse has bolted, and that it does not provide protection to consumers at the point of need.
Comments (21)
There are already over 700 rules and regulations that govern what we should be doing in the sector. Add to this the various things touted as ‘best practice’ and ‘codes of practice’ and there is more regulation than you can shake a hairy stick at. Before we introduce yet more regulations I think we need to explore ways to educate and enforce the existing regulations.
Takes Leaders as an example (since one of their people wrote the article), I randomly Googled their name and chose the first branch that came up, picked the first property I could find and whoever runs the office may like to brush up on the following:
CAP Code (Edition 12) rules 3.1 and 3.3 (Misleading advertising) and 3.19 (Prices).
The Energy Performance of Buildings (England and Wales) Regulations 2012
Some of the biggest cowboys in our area have those expensive window stickers and they mean diddly squat. The danger of introducing yet more regulation to get people to comply with existing regulation aside from being nonsense is that only the good guys will comply and this usually means more red tape and increased overheads. Meanwhile the people who never complied with existing regulations are not going to suddenly turn over a new leaf. Beam me up Scotty!
Dude, you know how I know we don’t need regulation? The same way I know the people in my tv set can’t see me. Jeez Weller’s so cute I want to hug him close and ruffle his hair because the big mope has got good intentions but this aint the way ahead. There’s more tread in promoting my Jack Daniels diet. Its awesome, lost three days already.
Sure, we got affiliation but just like l*sbian er*tica I’m still trying to figure out what they actually do [sad face emoji] other than date r*pe my cheque book. Listen, lets not get this all bent out of shape dude, there’s regulation out there bigger than a Babybel and it rocks.
Where in the South East of England is this horrendous place Mr Weller refers to, which suffers all these ills and has all these problems with the Lettings discipline of the property industry?
Is there A Town Called Malice, perhaps…?
Taaa boooom tishhhhhhh! the old ones are the best ones!
Good one PeeBee… Now that’s entertainment!
Why thank you, Robert and dth…
…nice to know that good old corn is still appreciated – even if it is to a select audience hidden In The Crowd!
Thing is, maybe this situation is found only In The City. I appreciate that This Is The Modern World, where we enjoy All Mod Cons, but the Sounds From The Street are clear indication that we are allowing ourselves to get Away From The Numbers – and let’s face it, when Bricks And Mortar are involved it is Time For Truth to Start! to triumph over the Non Stop Dancing around the issues.
The last thing you want is this issue Going Underground. The ramifications of such an occurrence would be horrendous – and it’s already bad enough Down In The Tube Station At Midnight.
Innit?
I am a new start-up agent. However do not be fooled or dismissive. I have worked in the sector for several years, dealing with landlords who have problem tenancies, often caused by agents and some so called good agents who, when looked into further, have all sorts of letters after their business name, belonging to all sorts of organisations! I have read the comments above and am torn. I am a great believer in conformity and rules but this drive for regulation and controls from what I am experiencing is simply yet another cash cow for organisations to abuse! These “professional” organisation voices were far too quite in the run up to the recent election, the silence was deafening! The materials they produce are out of date, I have experience of this. I will not pay hard earned cash to simply have letters after my name for which I get nothing back in return. If you have heaps of experience in the sector then why do you need to spend money funding an organisation that doesn’t do anything for you? Ridiculous! Have you ever thought that when you are putting their logo on your website, stationary etc.. You are actually paying them to advertise them? I thought you were all super-duper canny business people! What do you get in return, actually nothing! Example I read about CMP this and CMP that, why is it not mandatory to have this when joining a redress scheme (a requirement of law) if CMP was a lawful requirement then it would be. So who invented this CMP bandwagon and who benefits from it? I’ll leave you to work that one out. If you operate ethically and your customers are happy and cared about then why do you need it? Simple answer is, you don’t!
The real issue here is not so much Regulation but how will it be policed? You can have all the laws in the land but if no one enforces them then what use are they? Ask yourself and answer in 5 seconds without using google. How do you contact your local Trading Standards office? I bet hardly any of you know. Do you know their powers? The Police are dismissive “It’s a civil matter”, this is ignorance and should be challenged. However, if they are approached by Trading Standards it is a different story, “partner agency co-operation” and all that! Criminal law is a huge tool box, as a former officer I was taught how to think laterally when attending an incident. Most officers these days do not know how to or are petrified of swaying from the party line as they are held to ransom over their slowly eroding pension!
Some of you are right, regardless of regulation and law, criminals will always operate when given the chance. Here’s a thought, stop worrying about the competition and worry about yourselves. Do you offer the best customer experience possible? If you do then you will know that your client money gets passed on expediently, correctly and efficiently, then why do you need another bank account? Why isn’t it simply made law that ALL property agents must have CMP insurance, the problem is that these insurances require a CMP bank account? I have to ask, why? To reduce their risk which means making easy money, its nothing about offering a quality product to you! Does it actually reduce risk, no is the honest answer. So we go full circle to why do we actually need CMP if we operate honestly? “To give my customers confidence” I hear you cry. What are you doing to erode that confidence in the first place? Doesn’t that say something about the product you are offering/service you are delivering? I can hear the wails of derision from here. We do this and we do that, then why did I get so much repeat business from your landlords when you fouled up! That alone leads to mistrust that leads to you all jumping onto things like CMP etc…
All in all we need the incumbent and successive governments to realise that we in the lettings industry are not all villains but a means to assist the current housing crisis in the UK. I simply say work with us not against us. Support us, listen to us. We need a guild that gets a seat at the table, one voice that speaks to us all and for us all. Currently we have RICS, ARLA, NLA, UKALA, the list goes on. They are all independent profit making organisations. I have experienced all sorts of hurdles in enquiring about membership, when I analysed these hurdles it all came down to one criteria, money and where that money is going. I for one will not line the pockets of toothless organisations when they offer nothing in return, neither will I join a band wagon of self-perceived “best practice” when that lines the pockets of other people. I for one stand by my ethics, by integrity and my honesty. Act swiftly, efficiently and professionally, I take action on my staff if they do not adhere to my standards. Ultimately that results in my two stream customer base all being very happy because they have great customer service not a CMP in sight or membership letters and none of my landlords have ever asked me about it, they are only concerned that their money gets into their bank accounts when I have promised it will, which it does all the time every time.
Do you operate a regime of separation of duties?
Full on regulation is not the answer, but i’d definitely go with a happy medium/ Regulation ‘light’ and something that in the very least means that all agent owners having a certain qualification.
Paul Weller may be interested to know that I have received an email today confirming instructions on 5 rental properties previously looked after by an ARLA agent. Having had no rent for months, spent thousands on solicitors fees to evict the tenants and had his property returned virtually trashed with huge maintenance problems – these were onsite agents with a virtual monopoly over the whole development. No protection in place there for sheer incompetence! If you are incompetent and dishonest, no affiliation to these sorts of organisations will make a jot of difference to unsuspecting Landlords. In fact it lulls landlords into a false sense of security. Also I would add that being an ARLA member will not protect a Landlord or Tenant from being charged, what some ARLA agents now feel justified in charging, which are way above our standard advertised fees.
After months of having to endure the Labour Party wanting to radically change the way Letting Agents work with the banning of Letting fees, three year tenancies and anything else they could think of to further eradicate the Letting Agent, instead of letting sleeping dogs lie, there is always one who can’t resist opening his mouth. Truth is the last time Mr Weller probably went to a house to let it was when Labour were back in power. Another executive who thinks he has his finger on the pulse.
That old and tried tested phrase “unscrupulous Landlords and Rogue Agents” is becoming tiresome. Why don’t we concentrate on promoting the good for once and start saying there are hundreds of excellent Agents out there for the public to use and if you are a Landlords the best way forward is to use an established agent in your area.
For some reason the larger chains have a campaign of producing a negative approach unless they are self promoting themselves. Labour tried this last week and look how successful they were.
So lets start promoting the good, realise that if you are a good agent that provides good service and charges fair fees, the Rogue Agent will not survive for long in your area. As for poor Landlords regulation of Agents wont stop them,
Please do not forget UKALA as a professional body (created by the NLA) who are just as stringent as ARLA and require independent auditing and proof of all relevant insurances and membership of a redress scheme.
Other than Martin and co who effectively have all those benefits naturally built into a franchise operation who else is now in UKALA?.
I can not recall any news on UKALA since Ian Wilson’s press release a couple of years back and UKALA has only been mentioned in posts on EYE 14 times in 14 months!
If UKALA don’t promote themselves they will be forgotten.
For me UKALA have been very useful and supportive. I submit audited accounts/PII/TPO/MyDeposit/ etc and have an inbuilt CMP/redress scheme into my membership. However I agree that in the lead up to the general election more noise should have been heard from all professional bodies to support the PRS. I would like to see a more vocal industry supporting the excellent high standards that 99.9% of agents provide.
Sadly there are crooks with deliberate intentions to steal in every walk of life and we see every day that ‘regulation’ doesn’t stop them. What it (excessive regulation I mean) does though is makes the lives of the honest people more costly, cumbersome and difficult.
Perhaps not a helpful comment as I cannot go on to say what the answer is. But we have TDS, we have Ombudsman codes and redress( to late then of course if someone has departed for Rio with all of their clients monies ) We have ARLA RICS and of course common law.
Is it really that difficult to cone up with some ‘simple’ basic simple (and not expensive to run) requirements for everyone dealing in Lettings to be obligated to operate.
Perhaps a start would be to make it law that at the point of taking a client’s instruction to let their property the agent must confirm just how the client’s monies (and the tenant’s) will be protected with proof of that protection.
This would not stop the criminal with intent to steal,but the client would have financial cover for any losses.
When will you people stop peddling this myth that ARLA and NAEA are regulators? They have no more control over the industry than the AA does in the licensing of drivers. While you keep deceiving yourselves about your self importance you will not make progress. The lettings industry does need regulation – as Weller rightly says, proper regulation is essential. He doesn’t belong to any body that provides it, only those that pretend they do. This deception is no better than any other that plagues the industry. It causes confusion when what’s needed is clarity – and the full force of the law.
Sorry to be blunt, that is not correct. Both organisations require an independent annual audit of client cash accounts. There is more regulation from that single membership obligation than almost anything else
There have been huge benefits born out of software being written to comply with RICS, ARLA and NAEA client cash account codes of conduct. That is not government regulation that is self regulation from the industry bodies you are so keen to dismiss and knock.
There is a single data field requirement missing from providing a solution to cure the ills of the industry but it is government itself (HMRC ) who have said , in writing that a solution is of not interest to them.
If Mr Weller had the luxury of a helicopter view of the industry and its stakeholders he would understand why regulation, other than tying two bits of existing regulation together, is unnecessary.
Rosalind, I full heartily agree, a single regulator would be a good idea. However it would not stop any unscrupulous agents still operating as I am certain, just like the FCA body, the majority of public do not fully understand what a regulator means or actually does which I believe is more important than having a regulator. We have a financial services division within our agency so know too well how this would operate and I am uncertain if many true agents would survive this from ability of knowledge to potential associated costs. You would also need to reduce the redress system we have today which would mean choosing just one of these for clear governance. My experience of nearly 20 years experience under the FSA, now FCA, allows me an understanding of regulation, and even this body still cannot get it right. Regulate or Educate, I believe Educate first, lets avoid another unintellegent knee jerk reaction! Thank you for taking time to read. Martin, WestBerks Properties Ltd.
Ironic really Leaders are asking for regulation, the amount of horror stories I hear about broken promises and hidden fees. Careful what you wish for!
I’ve never read such nonesense.
Beware are what you wish for. There are already laws against companies and individuals stealing money and inappropriate behaviour. As an industry we should look to improve the method of enforcement of these laws rather than support costly and time consumming regulation.
Real corruption is intrusion into market efficiencies in the form of regulation, often supported by those who stand to benefit financially as a result of regulating others.
lets the law of the land do its work, let’s us support it, let’s us regulate ourselves, do not tell us how to live or work. LEAVE US ALONE
Regulation is not the answer to controlling competition. It is an easy option akin to telling Ros that Robert is being mean to you and dislikes won’t stop him. A seriously dislike button isn’t the answer.
There is a need to control the bottom feeders of the industry, but that is best done by being stronger competition and working in a way that mal practice isn’t viable let alone profitable