There have been further calls for some form of regulation of letting agents by The Property Ombudsman, Christopher Hamer.
Hamer joins a growing list of trade associations such as ARLA and RICS in calling for letting agents to be treated in the same way as sales agents and provide a consistency of redress for consumers.
He notes that over the last decade, the role of letting and managing agents has also grown dramatically and is now a £1bn per annum business, handling some £14bn per annum of clients’ money.
Hamer said: “The Government has made clear that it is looking to reduce the burden on businesses and has introduced its ‘Red Tape Challenge’ to de-clutter the statute books of unnecessary legislation. The government also wishes to avoid imposing burdensome regulation on business, preferring instead that business sectors put their own houses in order.
“However, those organisations involved in the property sector, including those with a consumer advocacy role, want some form of regulation to happen but realistically legislation is the only vehicle that can bring 100 per cent of letting agents within the fold.”
A growing number of property professionals are also calling for amendments to the Estate Agents Act 1979 to including letting agents.
Rosalind Florence, Head of Glentree’s Lettings Department, said: “Personally I believe that it gives the public the confidence to deal with an agent, safe in the knowledge that they abide by the terms set out by the ombudsman and NFOPP, and use best practice in dealing with members of the public, be they landlords or tenants.”
Frank Webster at Finders Keepers commented: “We have been members of the Property Ombudsman Scheme from the outset and we are strongly in favour of agents being members.
“If all agents were compelled to satisfy the provisions of entry to The Property Ombudsman Scheme, this would surely raise the reputation of the letting industry as a whole and deter those whose business practices fail to reach these standards of professional behaviour and who in some cases have been shown to be taking advantage of the lack of regulation to act is a dishonest manner.”
“Regulation could bring consistency and much-needed transparency to the lettings market if it's implemented correctly,” said Matt Hutchinson, director of flatshare website SpareRoom.co.uk.
Earlier this month, RICS announced that the introduction of professional standards which would result in the compulsory regulation of lettings agents could generate over £20m per year to the UK economy.
RICS research indicates that following an initial set-up cost of £45m the regulation of UK lettings agents and the introduction of professional standards for all agents to the industry would provide net benefits of over £20m per year and would thus pay for itself within less than two-and-a-half years. RICS say that 90% of consumers agree that regulation of the lettings industry was much needed.
Peter Bolton King, RICS Global Residential Director, said: “These findings demonstrate exactly why the government needs to act, not just to safeguard the thousands of tenants and landlords who fall victim to unscrupulous practice, but also to relieve pressure on the wider economy.
”RICS has long called for a single regulatory and redress system for letting agents, which this survey demonstrates is clearly supported by the overwhelming majority of consumers. Until this happens, we recommend that tenants use a lettings agent that is a member of a professional organisation, such as RICS.”
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