There has been an on-going debate recently concerning whether letting agents should have the same regulations placed upon them as estate agents, with many claiming that this is the only way to protect both landlords and tenants from rogue agents. However, some have argued that the regulations placed on estate agents would not be appropriate for letting agents, which is why at a meeting in the House of Lords yesterday Housing Minister Mark Prisk made an amendment to the Bill.
After listening to concerns over the plans in the current Bill, Mr Prisk put forward a new proposal which states that letting agents should have their own approved redress scheme or ombudsman that will help landlords and tenants if they have a complaint about a letting agent. Discussing the change, director of policy at the British Property Federation, Ian Fletcher, said: “The Housing Minister has listened to the sector’s representations and reached the right conclusion. Clearly this is an eleventh-hour amendment to a Bill that is not housing in scope; as such there is a limit to what can be realistically achieved.”
“Independent review of a complaint by an Ombudsman is good practice already pursued by many agents, and it is excellent that all tenants and landlords should now have access to such schemes. There are still issues left on the table, however, and 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 insuranceextended so that money paid over by landlords and tenants to an agent is properly accounted for and not at risk. As is the case with regulation, government support and resource for its enforcement to ensure agents are not paying lip-service to it, will also be vital.”
Currently, estate agents have to abide by regulations set out by the Office of Fair Trading, which Baroness Hayter proposed to the House of Commons should be the same for letting agents. The introduction of stricter regulations on letting agents has proved popular in general with landlords and tenants as it means there is less of a chance of properties being left unmaintained or tenants losing their rent deposits due to mishandling. In the long run this could even lead to landlord insurance policies becoming cheaper as it means there would be less risk in the property market, especially for those with large property portfolios who rely on letting agents for help.