In opposition to ARLA and RICS, the UK Association of Letting Agents (UKALA) boss Caroline Kenny has spoken against the necessity of an over-arching regulator for the entire property industry. This comes in response to ARLA’s call last week for accredited bodies like itself, RICS, and the NAEA, to be able to run their own mandatory licensing schemes, answering to a central regulator, for which they suggested The Property Ombudsman.
They also called for the mandatory registration of all private landlords, forcing them to join a landlord scheme such as the Residential Landlords Association or the National Landlords Association.
Caroline Kenny, executive of UKALA, disagrees with the idea of central regulation, although she does agree with other aspects of ARLA’s arguments. She said, “UKALA believes that regulation must be proportionate to the issues or problems it seeks to address and it appears that a more targeted response is necessary to challenge the negative experience of some and perception of many in the wider community.
“All of those living and working within the private rented sector should be able to expect certain minimum standards from professional agents providing letting and management services.
“This must include: professional indemnity insurance; comprehensive client money insurance; commitment to professional development; a robust complaints process with an independent provision for appeals; transparency and clarity of all terms, conditions and potential charges; and above all excellent customer service.
“While we do not believe that a central regulator is essential to ensure these standards are met, we would support moves to make these features a mandatory part of all letting and management services. In practice these elements exemplify the type of practices and security at the heart of most calls for statutory regulation.”
She continued, “Given the inevitable cost of any intervention intended to provide an assurance of minimum professional standards, it would be beneficial to reduce the cost to be borne by firms in the industry and potentially consumers.
“Furthermore, it stands to reason that using appropriate existing bodies to deliver positive outcomes should represent better value for money than attempting to construct an over-arching regulator.”
But Ian Potter, managing director of ARLA, is quick to point out that their position is not one of ‘my way or the highway’. Rather than butting heads, he says they welcome open debate, including the views of the wider industry. However, they remain firm in their pro-regulation stance. He said, “Regulating the sector is a complete win-win. Tenants will get better quality property and have their rights and money protected; the industry will be rid of unprofessional practice and enjoy a better reputation; and the Government will have a simpler system to oversee and ultimately fewer disputes to resolve.
“Failure to regulate will mean that rogue agents continue to blight the sector, damaging trust in the majority of responsible agents and resulting in poorer housing conditions and dwindling supply.”
Meanwhile, Newham Council, the first council in England to make all private landlords join a mandatory licensing scheme has announced that so far they have registered 15,000 landlords and 28,500 properties. They expect a further 6,500 properties (a total of one third of all properties in the area) to eventually come under the licensing remit.
They also claim to have shut down over 500 ‘beds in sheds’.
Sir Robin Wales, Mayor of Newham, has given evidence to the Communities and Local Government committee scrutinising the private rented sector. He told them, “We know voluntary accreditation does not work because we have tried it.”
He added, “We are discovering quite a lot of what we think is fraud going on. The scale of what we’re finding is very surprising.”
Peter Bolton King of RICS has also given his support to the pro-regulation side of the debate. He said, “We have long supported greater regulation in lettings to ensure consistency with sales, and welcome any move to highlight this debate. We, along with other industry bodies like ARLA, recognise the need to promote professionalism within lettings for the benefit of businesses and consumers, and believe clear and consistent mandatory regulation, targeted where the risks are greatest, is the best way to achieve that.”