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The Latest On Letting Agent Regulation and Fees

December 17, 2012 | Landlord News  

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Last week an Early Day Motion was tabled by Lib Dem MP Annette Brooke, calling for new regulatory framework for letting agents. Although unlikely to make it as far as the statutory books, it will nonetheless gather opinions and move the debate forward.

The motion reads: “That this House believes that the current regulatory framework for lettings agents offers limited and inconsistent protection of the consumer, creates red tape for business and restricts investment in the private rented sector, does not reflect how consumers interact in the sector and provides no clear distinction between how sales and lettings businesses are now organised; notes that any individual can set up and practise as a lettings agent; understands the importance of a redress mechanism for customer complaints; and urges the Government to require lettings agents to be members of a Government-approved redress scheme and to meet statutory minimum professional standards to trade.”

Shelter have been making waves in the lettings industry this year with their campaigning to end letting agents’ fees, resulting in a major success in Scotland where the law now says that letting agents can not charge tenants anything other than rent and deposit. However, apparently not satisfied, they are currently campaigning to get thousands of tenants to reclaim the fees paid in the past in a PPI-style farce. This has been devastating for a number of Scottish letting agents, and there is a concern that, while the law does not apply to the rest of the UK, due to Shelter’s relentless campaigning, it may only be a matter of time before a similar measure is introduced.

Despite their sustained and damaging attacks against the private lettings industry, Zoopla Property Group has controversially presented a cheque for over £30,000 to Shelter, including generous payroll giving by a number of the company’s employees. A spokesman for Zoopla said, “Shelter are a respected and well-regarded national charity who do great work to fight homelessness and we are proud to have raised such a significant sum for them. You will also no doubt be aware that they are also one of the designated charities being supported by the Estate Agent Foundation this year.


“We have seen no evidence or reason to believe that Shelter are anti-letting agent. Our understanding is that their campaign was against unscrupulous practices by a limited number of rogue letting agents. Like Shelter, we support the goals of ensuring that letting agents run professional businesses with transparent fees, not charging unreasonable fees to either landlords or tenants.”


Zoopla has also announced a new partnership with The Prince’s Trust, pledging a minimum of £25,000 in 2013, and has already committed £50,000 to a number of West Midlands charities. Alex Chesterman, CEO of Zoopla Property Group, said, “We take our corporate responsibility seriously and our employees have been very enthusiastic about getting involved in our various fundraising activities.

“Charities are increasingly dependent on donations from businesses like ours as government funding is being cut dramatically. We’re delighted to have raised more than we set out to for Shelter in 2012 and are looking forward to working in partnership with The Prince’s Trust to raise as much as we can next year.”

Shelter have been producing critical reports of the private rented sector for several years, uncovering examples of rogue landlords and unregulated letting agents that are taking advantage of vulnerable tenants. In response, Ian Potter, Managing Director of ARLA has said, “We can only respond that we cannot do anything other than have a system which requires you [letting agents] all to abide by a code and have a route to redress if matters are not adequately advised to the landlord and tenant consumer redress.”

Throughout 2012 ARLA have met with Shelter numerous times to discuss the issues of concern in the PRS. In the second half of November they met at a House of Lords event hosted by The Property Ombudsman Service, where Shelter launched the report by Michael Ball, putting forward the case for regulation of the PRS.

At a later event, hosted by Public Policy Exchange, Antonia Bance, Head of Campaigns at Shelter, discussed how to deal with rogue landlords with government officers.

ARLA have made a point of reminding Shelter that customer service and consumer protection does not come free, and that letting agents have costs to cover; that to take the same drastic measures seen in Scotland elsewhere in the UK due to the unscrupulous practices of unregulated letting agents would be like killing the patient to cure the sickness.

ARLA have advised letting agents to ensure that they, their colleagues, their tenants and their landlords are all fully aware of their charges and what services they can expect. ARLA accredited letting agents like Let-Leeds are required to comply with a Code of Practice and Rules of Conduct, ensuring protection the event of malpractice.

Potter continued, “We will continue to engage with all those who want to see a better PRS, although in many different ways. Those currently include, Shelter, Crisis, the Labour Party and its shadow Housing Minister Jack Dromey, the Lib Dems and the Greens as well as individual MPs and the DCLG as the relevant Government Department , with whom we are due to meet next week. Many of these meetings do take place under Chatham House Rules which makes dialogue reporting difficult. During the party political conference season we also engaged with the Housing Minister Mark Prisk.”

 

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