All letting agents across England will have to be registered under new legislation, Communities Secretary Sajid Javid said yesterday.
He made the announcement yesterday afternoon at the Conservative party conference, making clear: “We will regulate letting agents who want to operate.”
It means that the days of anyone being able to set up as a letting agent – even if they have just come out of jail after stealing deposits or have no experience of the sector – are finally drawing to a close.
It is not clear why ministers have at last cracked after many years of campaigning from within the industry itself that there should be regulation. Successive housing ministers in both Labour and Conservative administrations have either refused or failed to bring in regulation, usually citing not wanting to add red tape to the industry.
However there has been case after case of agents mis-using tenants’ deposits and failing to pay rent over to landlords, disappearing into the sunset with the public’s money while police have too often said it was a civil matter where they would not prosecute.
Until yesterday, ministers have so far been deaf to demands that letting agents should be regulated – those demands being made not in order to protect the industry, but to protect tenants and landlords.
Tenacious campaigners have included Labour peer Baroness Hayter. Yesterday afternoon, she told EYE she was thrilled, saying: “I am delighted the Government has finally agreed to our long-held view that letting agents – who handle people’s homes – should be both qualified and regulated.
“Landlords and tenants alike will welcome this move. We will push for the earliest possible introduction of this legislation.”
David Cox, managing director or ARLA Propertymark, said: “After 20 years of our campaigning falling on deaf ears, we’re very pleased the Government has taken the decision to regulate the private rented sector.
“This will be the single greatest step forward in a generation, in terms of consumer protection for private tenants, and will do more to clean up the image of the industry than the hundreds of smaller laws and pieces of legislation introduced over the last 20 years.
“However, regulation can take different forms and we need to see the detail of proposal to be confident that it will be effective for tenants and landlords.”
There is no detail as to how exactly far the new intended regulation will go, but it looks as though organisations such as ARLA Propertymark, RICS and NALS will have an all-important role to play.
Last night, NALS boss Isobel Thomson told EYE: “The measures in the minister’s speech are very welcome news giving clear confirmation that the Government is adopting a coherent, strategic approach to the Private Rented Sector for the benefit of consumers.”
Javid yesterday said: “Currently, anyone can operate as a letting agent without any qualifications or professional oversight.
“We will change the law so that all letting agents must register with an appropriate organisation.
“This will mean that letting agents would be required to satisfy minimum training requirements and comply with an industry code of conduct.”
Private landlords are also to face regulation, with Javid announcing that they must all become members of a redress scheme – either in their own right or through a letting agent – which will offer dispute resolution.
Javid said: “We will make it mandatory for every landlord to be part of an ombudsman scheme, either directly, or through a letting agent. At the moment landlords, unlike letting agents, are not required to sign up to ombudsman (redress) schemes.
“We will change the law so that this becomes a requirement, giving all tenants access to quick and easy dispute resolution over issues like repairs and maintenance.”
Javid also announced yesterday that new incentives will be unveiled in next month’s Budget to ensure tenancies are at least 12 months.
In addition, there new court of law, specifically dealing with housing issues could be set up, with Javid saying that there will be a consultation with the judiciary.
He said: “We will explore whether a new housing court could improve existing court processes, reduce dependence on legal representation and encourage arbitration, with benefits for both tenants and landlords. We will consult with the judiciary on whether the introduction of a new housing court can meet the aim of saving time and money in dealing with disputes.”
Javid said: “For too long tenants have felt unable to resolve the issues they’ve faced, be it insecure tenure, unfair letting agents’ fees or poor treatment by their landlord with little to no means of redress. We’re going to change that.
“We will insist that all landlords are part of a redress scheme and we will regulate letting agents who want to operate.
“Everyone has a right to feel safe and secure in their own homes and we will make sure they do.”
The private rental sector currently accounts for a fifth of all households, about 4.5m in total.
Wales – which like Scotland, has its own devolved housing powers – has already introduced the Rent Smart Wales regime, making it mandatory for private landlords to be registered and for all letting agents in Wales to be regulated. Agents must undergo training and be ‘fit and proper’ persons. Landlords who carry out any property management must also be regulated; if not, they are required to use a regulated agent.
For English agents offering both sales and lettings, there will be a question mark as to how far each of those operations will be regulated, and their compliance. Sales agents have to abide by the Estate Agents Act (which excludes letting agents) but do not have to register: lettings agents will, however, have to sign on to a central register but it seems might still not have to comply with the Estate Agents Act, which has banning powers.