The Department for Communities & Local Government (DCLG) has launched a call for evidence to inform proposals to ‘protect consumers’ in the letting and managing agent market.
Crucially, this call for evidence covers all managing and lettings services by property agents in the private rented and leasehold sectors.
The call for evidence points to considerable overlap between the leasehold and private rented sectors, suggesting that 43% of leasehold properties are let in the private rented sector and that it is likely that (in these circumstances) property agents will be providing both letting agents’ services and property management across both sectors.
Commenting on the launch of the review, Secretary of State for Communities, Sajid Javid MP) said:
“This is supposed to be the age of the empowered consumer – yet in property management, we’re still living in the past.
Today we are showing our determination to give power back to consumers so they have the service they expect and deserve, as part of my drive to deliver transparency and fairness for the growing number of renters and leaseholders.
Our proposed changes to regulate the industry will give landlords, renters and leaseholders the confidence they need to know that their agents must comply with the rules.”
The Government wants views to inform changing the law to combat perceived poor levels of service and consumer harm.
In effect it is considering the introduction of minimum standards and prescribed qualifications to improve the experience of leaseholders and private tenants.
The call for evidence explores different potential models of regulation and believes that there are broadly three ways that this could be achieved:
- Requiring all letting agents and managing agents to be members of a relevant professional body (such as UKALA, ARLA or ARMA). This would require professional bodies or organisations to be approved by Government, possibly operating to one Code of Conduct.
- As above, but with oversight from a regulatory body, established or approved by Government.
- Government establishing or approving a new regulatory body, which agents are required to sign up to. Membership of a professional body would be optional but lower entry fees could apply to agents that are members of an existing body.
Other measures being considered as part of the call for evidence include:
- how consumers can be empowered in the market, including whether leaseholder tenants should have a greater say over the appointment of managing agents;
- how transparency can be increased in the system so that tenants and leaseholders know what they are being charged for and why;
- ensuring fairness and openness around relations between freeholders and agents.
The call for evidence will run until 29 November 2017. Government will bring forward detailed proposals early next year.