For the first time in UK history the Government have decided to regulate the UK lettings and property management industry
Lettings and property management agents in the UK are set to face government regulation, after decisions were made in the House of Commons to take action to clamp down on unscrupulous behaviour, according to reports.
The new rules will see amendments to the Enterprise and Regulatory Reform Bill, will mean that all lettings and management agents will be required to sign up to a redress scheme allowing consumers to report unresolved disputes to an ombudsman, who will have the authority to ensure that agents repay any tenants and landlords they may have deceived.
The changes have come as welcome news to many property professionals, after calls from many corners for letting agents to be monitored and checked.
The Royal Institute of Chartered Surveyors (RICS) extremely happy with the regulation changes, because they were at the forefront of the campaign for regulation.
However, RICS global residential director, Peter Bolton King, noted that the change only offers support to consumers after they have been treated unfairly. He stated “This is a step in the right direction, however there is still more to be done to raise standards in the market and protecting the consumer throughout the transaction,” he said. “The market has been dogged by poor practice and a lack of consumer protection. This new redress scheme will enable disputes to be investigated and, if applicable, compensation awarded. We still think there is a very strong business case for better targeted regulation and we are working with the government to that effect.”
RICS are also keen on having lettings and property management agents sign up to a professional regulation scheme, to ensure a higher standard of professionalism throughout the rental property sector.
The British Property Federation (BPF) also welcomed the news, but added that there are still some issues to be dealt with.
BPF policy director Ian Fletcher said “We should not kid ourselves that this will expunge the sector of bad letting agents. For example, we will continue to campaign to have client money protection insurance extended so that money paid over by landlords and tenants is accounted for and not at risk,”
The National Association of Letting Agents (NALS), said that the government were sensible not to enforce a formal regulatory regime. They believe it would cause increased rents for tenants and stifle entry into the market.
NALS chief executive, Isobel Thomson, said “All NALS agents under our strict registration criteria are required to be part of an ombudsman scheme. NALS believes that the introduction of mandatory membership of an ombudsman scheme is the first step, and there is more industry organisations can achieve. Collaboratively working on initiatives such as the SAFE agent campaign will raise awareness of the need for consumers to use an agent within a Client Money Protection Scheme.
Chris Norris, head of policy at the National Landlords Association (NLA), said “The regulation will help to ensure that consumers receive adequate protection when using letting services.”
The UK Association of Letting Agents also welcomed the regulation. Executive Caroline Kenny said “We have long believed a solution was needed to address the issues, but that a poorly devised regulatory approach could prove damaging to the sector. We must not forget that the vast majority of letting agencies are small and medium sized businesses which will face greater hardship complying with additional burdens, the association are looking forward to working on the development and implementation of future regulation.”
A spokesman for Castledene Property Management, one of the UK’s fastest growing and award winning property management companies stated “We welcome government regulation as it will bring all lettings agents together to operate in the same way, this will improve the services and customer commitment of many property lettings businesses and will provide tenants with services they can rely on. Castledene have campaigned for better standards within the UK lettings industry for a long time and have invested heavily in our staff development, resulting in multiple national awards and accreditation for the Investors in People award, and the company have developed detailed operational systems and processes to ensure that we offer the very best services to our landlords and their tenants”
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