The Government is moving closer to introducing a single ombudsman to cover the whole of the housing market, following an announcement over the weekend that it is holding a consultation into the way in which property redress is handled.
Housing Secretary Sajid Javid revealed details yesterday of the eight-week consultation, which relates to the housing market in England.
Its aim is to “shape a similar and better complaints system” to allow disputes to be resolved more quickly and allow consumers access to compensation more easily.
Options considered in the consultation include:
- introducing a single housing ombudsman to cover the whole of the housing market, including the social housing market
- the question of whether homes builders should be required to join an ombudsman scheme
- naming and shaming poor practice to help tackle the worst abuses
Javid said: “For too long, tenants and home owners have navigated multiple complaints procedures to resolve disputes about everyday household repairs and maintenance.
“Fixing this housing crisis is about more than just building homes, it’s ensuring people have the answers available when something goes wrong.
“Today’s top-to-bottom review shows government is working hard to deliver a better and simpler system.”
The announcement comes less than two weeks after Ombudsman Services said it would quit the property sector, saying it no longer wanted to officiate arbitration services as “a broken solution to a broken market”.
It will begin a managed withdrawal from the schemes it runs for agents, surveyors and managing agents. It plans to exit altogether by August 6.
Even before the announcement from the RICS-backed redress scheme, a shake-up of the system and the creation of a single ombudsman was already on the cards.
Headed by chief ombudsman Lewis Shand Smith, Ombudsman Services says it would start work to develop a new model for redress in housing “to rebalance power in the sector” and that it would be putting its report around the creation of a single housing ombudsman to the Ministry for Housing, Communities and Local Government (MHCLG) this spring.
Its withdrawal will leave just two organisations offering redress to the public who have complaints against sales and lettings agents.
The older is the Property Ombudsman and is the de facto organisation for almost all NAEA and ARLA members.
The other is the Property Redress Scheme, launched when the Government said it wanted more choice in the market when it made redress compulsory for letting agents.
MHCLG added: “Unlike other areas, such as financial services that have a single and accountable ombudsman, housing has over four different complaints bodies.
“In the private rented sector, there is currently no obligation for landlords to register with a complaints system and this can often leave thousands who do not use a property agent without any option for redress.”
Responding to the news, a spokesperson for the Property Redress Scheme said: “The Property Redress Scheme welcomes the opportunity to engage in this process.
“The fact that the Government is taking this issue seriously is very positive.
“We support the principle that the consumer is put at the heart of the push to raise standards and that they are entitled to a clear, easy to access route to resolving their problems.
“There are clearly gaps in the current system, not least that landlords are exempt from any obligation for redress and these need to be closed.
“The Minister however should understand that there is no magic bullet and we at the Property Redress Scheme, believe that a collaborative approach is essential with Government at all levels working with the industry to put in place a joined-up strategy for providing quality homes and protecting the consumer.”
David Cox, chief executive, ARLA Propertymark and Mark Hayward, chief executive, NAEA Propertymark said: “We support the concept of going to a single ombudsman and a single point of redress.
“It’s a positive step forward for the industry and the most sensible solution for enhanced consumer protection.
“Ultimately, we support anything that can be done to make things fairer and more transparent for consumers.”
Isobel Thomson, NALS CEO, added: “NALS welcomes the speed with which the Government has brought forward this consultation. The simplification of the complaints process for consumers is to be welcomed.
“It makes sense to have one point of contact to engage with to ensure complaints are dealt with effectively and efficiently.
“We want a private rented sector that is safer and fairer for all – tenants, landlords and letting agents, so we are pleased to see the consultation re-enforces Government’s commitment to ensure private landlords are covered by a redress scheme.”
The full consultation document can be viewed here.
Separately, the Government is considering making it law for landlords to carry out electrical installation checks every five years, as part of a range of new requirements and recommendations regarding electrical safety in the private rented sector.
The Government estimates that the checks would cost around £160.
The proposal comes as part of another eight-week consultation (from February 17) looking into electrical safety in the private rented sector.
The consultation will consider a series of recommendations made by the Private Rented Sector Electrical Safety Standards Working Group.
Another recommendation is that landlords should be “encouraged” to conduct visual checks of the safety of electrical installations at the change of each tenancy.
For the full consultation document, click here.
The industry has been attempting to do and calling for a single point of contact for years. If (and it is a big if) the government can get this right, it can only benefit good agents and consumers.
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My only worry Chris is that once there’s a monopoly we are over a barrel with costs. One of the reasons that we chose ombudsman services was the low subscription, we have never had a complaint and work hard to ensure that we don’t. Paying a higher subscription to subsidise the sloppy agents who collect complaints like badges of honour is wrong.
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I agree there is plenty of scope for Mr Cockup and Miss Unintended-consequences to pay a visit however, there potential positives outweigh the potential negatives (in general).
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Is it in the bag that TPO will be the single ombudsman?
It is for the very fact that most agents don’t actually have a need for redress that the ombudsman services model is the one I’d singled out as the one I’d like to work with for rummage4. Since Simon’s promotion communication with OS has become harder but as the timing is only just coming right now I wasn’t something I’d worried about.
I’d like a redress scheme where B2B complaints are properly considered rather than just dismissed as “agents’ gripes”
I guess if there can be a single redress provider for consumer woes there’s nothing to prevent the formation of an effective industry regulator: There is desperate need for informed and effective policing of the industry, that’s the void that needs filling rather than a reinforcement of consumer protection regulations.
No-one is policing the portals, misleading AVMs or the CRM systems. Those 3 elements of the industry have a huge impact on all the stakeholders within the industry yet there is no meaningful or enforceable regulation which provides any protection for agents or their clients.
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In respect of the five year Electrical & Insulation Test, how have they got £160? I have never had a property simply pass, this is because when tested the electrics are measured against current wiring regulations and not simply that it is safe and in good order.
A property built five years ago would fail the inspection but clearly would be perfectly safe. On smaller properties this needs a little more thought rather than the usual sledgehammer on a nut scenario, which is usually adopted in the Westminster Ivory Tower.
Good sensible legislation across the board, one redress scheme and CMP. If they can get that right to start with I would be overjoyed.
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“Is it in the bag that TPO will be the single ombudsman?”
You bet it is! ARLA Propertymark the only runner by the looks of it too.
Message to the Government:
– Take your time, get cross party political approval so legislation lasts longer than the next government (i.e. no piecemeal / populist legislation just to make you look good!)
– Incorporate the Tenants Fees Ban
– Incorporate Private Landlords as well as Agents
– Provide a transition period
– Regulate it properly
or…in a nutshell don’t mess it up (stronger word for ‘mess’ was my preferred word here!!!)
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Rant deleted!
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If the above happens its a dark day for independent agencies, this favours the corporate agents massively.
The cost to be in a regulated industry is large. Its also an open book for the regulator to print money.
For all of you that think its a good idea, think again.
I am speaking from experience, this will cripple independent agents.
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