As a direct result of pressure from the industry, the Government has amended the Housing and Planning Bill to enable ministers to legislate for client money protection insurance (CMPI) to become a legal requirement for letting agents in England in the near future.
A broad coalition of organisations including UKALA and the NLA recently backed an amendment advocated by Lord Palmer and Baroness Hayter in the House of Lords. This amendment was not accepted by the Government, minister Brandon Lewis having recently rejected the notion of required CMPI yet again, but has forced the Department for Communities and Local Government to include an enabling clause in the Housing and Planning Bill – providing a means for later regulation.
Furthermore, the minister has committed the Government to review CMPI in the near future. In discussions with the Department, UKALA has learned that this is likely to take place following the 12 month review of regulations introduced in 2015 to increase transparency of letting fees.
While the minister is understood to remain unconvinced, it is looking increasingly likely that his reservations may not be enough to block the change this time around.
It is estimated that letting agents currently hold around £2.7 billion of client money much of which sits in the accounts of firms with no insurance should things go wrong.
