New crackdown – including possible criminal sanctions – on letting and managing agents announced

With bizarre timing the Government released an Easter parade of three important new updates relating to the private rented sector.

They were issued just after midnight on Easter Day.

One is described as a new crackdown – albeit one that has been heavily trailed – on letting and managing agents.

A second is a round-up of, and reaction to, the consultation on improving the sector. The third document (see next story) is on the introduction of Compulsory Client Money Protection.

Reaction from the industry has been positive, with ARLA chief David Cox saying: “We are hugely supportive of these proposals. After 20 years of campaigning, the Government has finally listened to our call for proper regulation of the industry.

“It must be the right of every landlord and every tenant to have a letting agent who knows what they are doing, is professionally qualified, and the money they entrust to their agent is protected. This is a huge step towards creating a level playing field across the industry, and we look forward to working with the Government on this.”

Proposals under the new crackdown are:

  • An independent regulator and code of practice for letting and managing agents
  • Possible prosecution for agents breaking the code, with criminal sanction
  • Letting and managing agents will be required to obtain a nationally recognised qualification in order to practise
  • At least one person in every organisation will be required to have a higher qualification
  • All letting and managing agents must undertake continuing professional development
  • Agents who fail to comply will not be allowed to trade

The Easter Day announcement also proposes a new system to help leaseholders challenge unfair fees including service charges; and support for leaseholds to switch managing agents where they perform poorly or break the terms of their contract.

The new code will be developed by a working group consisting of agents, tenants and regulation experts.

This group is to be “established as soon as possible” and is expected to draw up its final proposals early next year. In its remit, it will look at what an agent is in terms of mandatory qualifications. While the requirement will not affect support staff such as cleaners, caterers and, generally, secretaries, it could take in those who do both admin and lettings work.

The group will also look at charges for freeholders and leaseholders, and whether they should be capped or banned. This includes the use of restrictive covenants, leasehold restrictions and admin changes.

Isobel Thomson, CEO of the National Approved Lettings Scheme, said: “NALS has consistently called for regulation and unreservedly supports the Government’s announcement of its intentions and strategic goals.

“Agents who already submit to self-regulation should have nothing to be concerned about.

“NALS will continue to be at the forefront of discussions over the Government’s route map.”

Gerry Fitzjohn, chairman of The Property Ombudsman board, described the announcement as “incredibly welcome news”.

The accompanying document to the news of the crackdown, also released just after midnight on Easter Day, reveals that of the 1,793  responses to its consultation on ‘Protecting consumers in the letting and managing agent market’, just 18% were from letting agents and 5% from leasehold managing agents.

Its response also makes reference to the bewildering number of other consultations and calls for evidence in the property market, with a report in the Sunday Times suggesting this has more to do with the Conservatives gathering votes from generation rent than anything else.

https://www.gov.uk/government/news/new-crackdown-on-rogue-agents-to-protect-renters-and-leasehold-homeowners?utm_source=526d75f9-d354-4264-87c7-1b07f9c23cdd&utm_medium=email&utm_campaign=govuk-notifications&utm_content=immediate

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/696148/Protecting_consumers_in_the_letting_and_managing_agent_market_response.pdf

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4 Comments

  1. Beano200062

    Yawn, and the usual rule breakers will carry on knowing there is insufficient policing and enforcement, while everyone else runs around complying and adding more tiers of red tape and cost to their businesses. How about requiring the same of private landlords?

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    1. smile please

      Spot on Beano.

      Punishment for the good.

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  2. Headache

    Two days late

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  3. jeremy1960

    There is no way that this should be actioned without the inclusion of landlords, most issues that we see occur when landlords and tenants’ money come together!

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