In a statement released on Easter Sunday, the government announced the findings of its recent consultations on the issue and proposed the creation of a new independent regulator which would have responsibility for all letting and managing agents. The regulator will have enforcements powers while criminal sanctions could be imposed on those not behaving correctly.
All agents will have to adhere to a new code of conduct and obtain a qualification in order to operate.
Proposals were also announced which will support leaseholders looking to challenge unfair service charges or move managing agents.
For an industry that has long been unregulated, both from a finance and a conduct point of view, buy to let is certainly starting to be policed. And, I have to say, that can only be a good thing.
While, from a finance point of view, some of the new rules put in place by the Prudential Regulation Authority are having an adverse effect on buy to let in the short term – with application processes taking longer and criteria becoming tougher to meet – in the long term it will undoubtedly make for a safer market.
And the same can be said about the changes to the letting agency market. Any new regulation involves a period of upheaval and this can be difficult – and, indeed, expensive to adapt to. But once the dust has settled and the new system is bedded in it’s clear we’ll be operating in a market that is safer for all involved.
Regulation of this area of the market will go some way towards dispelling the myths of greedy landlords and even greedier agents. We’ll have greater transparency in the sector and as such it’ll be more difficult to lob criticisms at the market that are unjust to say the least.
What’s more, of course, we’ll see those people who don’t behave appropriately exit the market.
The new code of practice, it is claimed, will be developed by a working group of which representatives for agents will be a part. This gives the industry a chance to have that much needed input into their own market and I think everyone will come off better as a result.
