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‘Easy fix’ would give more protection to lettings market

After the formation of the Coalition government in May, Grant Shapps the housing minister, made it clear that any form of legislation to regulate the lettings sector would not be a priority.

‘More and more people will be looking to the private rented sector for their housing needs whether because they cannot get financing to buy a property or because government cuts will possibly impact on the availability of public sector housing. It is now more than ever imperative that consumers in the private rented sector gained some protection,’ said Mr. Hamer as he launched his latest Interim Report for 2010, released today.

‘If the Coalition was to review its stance, it could easily gain a quick win by expanding the scope of the Consumers, Estate Agents and Redress Act 2007.

‘That Act required all residential sales agents to join an approved redress scheme to settle disputes between consumers and agents. Encompassing a similar obligation for letting agents would be an obvious consistency and could result in the entire sector (not just those firms who have voluntarily agreed to follow its standards) operating in accordance with the TPO Code of Practice.

‘Our Code is not a heavy-handed regulatory regime. But taking this simple step would mean that the whole industry has parity and no firm would be outside the standards. It would make competition fairer while offering consumers greater protection. I recognise that full coverage of the market place through a formal regulatory structure can only come about through significant legislation but if the government was to take a positive view of my proposals and encourage the industry itself to establish a relevant regime I am enthusiastic about contributing to that concept.’

Mr Hamer hopes to arrange a meeting with Mr. Shapps to press the case for a change in legislation.

‘More than 7,000 lettings offices in the UK are already signed up to the TPO Lettings Code of Practice voluntarily so clearly a large proportion of the industry itself sees this move as necessary,’ adds Mr. Hamer. ‘My report shows there is still a large number of complaints regarding lettings agents, numerically on a par with sales agents for whom TPO membership is almost double the size.

‘Visiting estate agents and talking to them about industry issues is a large part of my job and with the backing of legislation to force all lettings agents to join an approved redress scheme it would be much easier to know who is operating in the market and to observe their standards.’

Figures in the interim report show that sales agents and lettings agents ended the quarter with the same number of cases (150) being opened for both industry sectors. But lettings agents generated far more enquiries than sales agents in the same period – virtually 70 per cent higher at 1,975. This is vastly different from the variance in earlier quarters of 2010 although a lightly less dramatic rate of climb than for the same period last year.

‘What concerns me more is that when you survey the membership figures, there are 46 per cent more sales agents in the scheme than there are lettings agents,’ said Mr. Hamer. ‘The ratio of enquiries to membership numbers is one for every 9.7 sales offices compared with one for every 3.9 lettings offices. Clearly there is work to do in the lettings sector to improve standards and bringing lettings agents into the scope of CEARA would be a realistic and easily achieved first step.’

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0 thoughts on “‘Easy fix’ would give more protection to lettings market

  1. Leaders says:

    As the UK’s largest independent letting agent, we see too many cases where landlords and tenants come to us after being badly let down by letting agents that are not members of any professional body. Many people don’t realise that anyone can set up as a letting agent, with no understanding of the market, no knowledge of the complex legislation involved, and no protection in place for the rent and deposits they hold. Unless the agent is a member of a professional body, there is no redress scheme for landlords or tenants to call upon if something goes wrong.

    Letting is not something you can easily dip into and out of when it suits. There is a lot at stake, not least the safety and wellbeing of tenants and the success or failure of a landlord’s investment. And when something does go wrong, it can have dire consequences – both for landlords and tenants. Landlords can face huge legal expenses, loss of rent, long void periods, loss of tenant’s deposit and penalties for not complying with legislation. For tenants it can be a matter of life and death if legislation regarding the safety of the property and its contents is not complied with.

    For the 27 years we have been letting property, Leaders have campaigned for better standards in the industry to protect landlords and tenants. We support the Property Ombudsman’s call for all agents to have to join an approved redress scheme. And until this happens we would urge the public to be aware of the risks and to only ever deal with an agent that is a member of a professional body such as ARLA or RICS.

    The peace of mind this brings in invaluable. For example, as ARLA members, our staff are qualified to offer lettings advice, our clients’ funds are fully protected and held in a bonded account, and our clients have access to a redress scheme. Dealing with an agent that cannot offer these reassurances is simply not worth the risk.

  2. Major Landlord says:

    All the biggest problems I have ever had have originated from tenants found by letting agents, and with properties “managed” for me by major name ARLA member letting agents: including poor inventory checks that made it impossible to claim the true cost of damage on termination, rent guarantor agreements that proved to be worthless, excessive voids, sloppy management of repairs, duplicate charging, and failure to conduct essential repairs leading to my being reported to a local council!

    I have yet to find an impressive letting agent: the best has been little more than adequate, the worst dangerously inefficient. And membership of ARLA makes NO difference at all: there is no control over the individuals who work in these major firms, and most seem totally disinterested in doing their jobs properly.

    I now only use agents when I have no alternative.