Letting agents face tougher regulation

The government has finally agreed that tenants and landlords need better protection from unscrupulous letting agents.

This week the government announced that they will amend the enterprise and regulatory reform bill to require letting and managing agents to belong to an approved redress scheme.

The move followed a widespread campaign by Labour, industry and consumer groups. 

Previously agents had not been legally required to be members of an ombudsman scheme despite the industry handling billions of pounds each year.

While most of the industry has signed up to self-regulation, up to 40% remained outside of any scheme making it difficult for consumers to seek compensation should they need to.

Although the Royal Institution of Chartered Surveyors pointed out that the governments proposed change to the Estate Agents Act only gave consumers support after the ‘damage had been done’, Housing Minister Mark Prisk said that it did address their concerns;

“We think the key issue for most people is the ability to get redress when they’ve got a problem.  I think some of the additional regulatory burdens we feel would be disproportionate.”

It is hoped that legislation will come into effect by the autumn following consultation with industry and consumer groups.  As part of this process the government will decide whether to approve one or several redress schemes and what type of penalties to impose.

Some within the industry remain sceptical about whether the proposed moves will help drive out rogue agents.  Lucy Morton of estate agent WA Ellis said;

“There is still a long way to go in ensuring better standards across the industry, and I fear that without full regulation we’re stopping short of putting an end to rogue agents and bad practice.”

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