The most recent has been consumer watchdog Which? calling for letting agents to be governed by the same laws as estate agents stating that consumers were gambling whenever they chose a letting agent after they uncovered bad practice. This report followed one from RICS who compared the private rented sector to the Wild West. I champion these expert findings as there certainly are unscrupulous businesses operating in the field and as a result there is very little valued placed on the work of letting agents.
Although there have been various Government schemes put in place over the last few years, recent research has raised debates as experts question whether they have helped in any way to raise standards or not. The categorical response to this is that more needs to be done and different regulation needs to come into play in order to change the standards in the industry.
Government-backed schemes that have been introduced were established to help safeguard tenants and landlords, and to also improve standards in the private rented sector. In 2007 the Tenancy Deposit Protection scheme was introduced and I did read research recently stating that tenants are now more aware of what is available to them. This in itself is good news as tenants should absolutely have all knowledge about requirements now in place, but I don’t think that this scheme has had any real impact on the market and the fact of the matter remains that something else needs to be done urgently to raise the value of the service as it is imperative if the industry is to prosper.
With already so much legislation covering the private residential letting sector, most of which hasn’t had the desired effect, I wonder if there could be a simpler way forward. I want to make an issue of the fact that there are two distinct roles performed by letting agents, the first being the sales role of marketing the property and securing the tenant, similar to the role of the estate agent and the second being that of a legal advisor and financial controller. If you compare the process to that of selling a property where the legal and financial aspects of the sale are handled by solicitors surely there is a case for making letting agents or managing agents who deal with legal documents and handle client’s funds answerable in the same way.
Solicitors are heavily regulated, and any solicitor found to have mishandled client funds can be struck off and no longer practice. Rental income should have the same value as monies that pass through the hands of a solicitor as surely all clients’ monies should be protected in the same manner. People sell their homes with absolute confidence that the financial aspects will be dealt with properly by their solicitor, and if not they have a very clear route for redress and I believe that it should be the same in lettings.
Along with other experts, I call for the Government to look at how the industry as a whole is regulated. The timing is perfect for reform. Although the industry is thriving as people still struggle to finance the purchase of a new home, it is widely known that inexperienced agents have opened their doors to the lettings arena causing all sorts of problems to the reputation of agency practice. Legislation so far hasn’t rectified this and opting for certain letting agent practices to be regulated in a similar manner to a solicitor would be a simple alternative to self regulation with all the different bodies with different levels of entry requirement. Going forward in this manner could make it a standard and common obligation for all letting agents who provide the supporting legal and financial assistance.
