Even the most vociferous opponents of red tape, and the creeping march of new legislation in our society, would likely acknowledge that regulation of residential letting agents is long overdue.
The sector has expanded at a dizzying rate, putting the UK on course for third spot behind Germany and France with the largest private rental market in Europe. And let’s face it, letting agents don’t exactly enjoy the greatest press and are finding themselves under scrutiny as never before.
So this dispute resolution legislation, with its emphasis on consumer protection, is both aptly timed and, as far as local authorities are concerned, complements perfectly the work that their private rented housing teams already undertake. Factor in existing initiatives, such as tenancy deposit protection, and the forthcoming Letting Industry Code, and we can be confident of an across the board improvement in standards.
Further, I believe an added bonus of the legislation is that it will also supplement local licensing where this in place.
So how will it work and what can local authorities expect? The expectation is that private rental housing teams will be the ideal departments, given their local expertise and knowledge, to enforce the legislation. With penalties of £5,000 for non-compliance, this money can be reinvested in improving standards in local areas, while the Government has indicated that it may make other funds available to assist enforcement.
The three operators will work closely with local and central government to promote the existence of the legislation and, crucially, that membership of one of the schemes is compulsory, but it doesn’t end there.
We have pledged to exchange data and intelligence on the small, but damaging rogue element in the letting agent sector and to close off any loopholes that prevent a rogue agent joining one of the schemes if they have been kicked out of another one.
So this is legislation with real teeth and the power to inflict lasting sanctions where these are warranted.
The social and public housing sector is exempted from the legislation where they manage the property, however if a local authority or RSL acts as an agent for the letting of privately owned property, it could be subject to compliance.
The Department for Communities and Local Government’s explanatory memorandum to the letting and property management agents’ schemes covers the legislation in greater detail, but for me and my colleagues in the Property Redress Scheme, this is a great example of how private and public sectors can collaborate effectively for the common good.
Sean Hooker is head of redress at the Property Redress Scheme.
