The House of Lords Industry and Regulators Committee is looking into the quality of service given by letting agents and whether the sector needs an official regulator.
The committee began holding evidence sessions last month, and has already heard from lettings industry representatives, tenant activists and others.
The main question is whether the lettings sector needs a new regulator and a mandatory code of practice. At the moment, landlords and tenants in England who have a dispute with their letting agent can refer it to a redress scheme, but there is no single regulator for the industry. Letting agents in Scotland and Wales, on the other hand, have to sign up to mandatory codes of practice.
What would a regulator mean for the lettings industry?
Industry redress schemes already have powers to deal with letting agents who provide poor service. Last year, the Property Redress Scheme ordered agents to pay out more than £950,000 in compensation – almost double the figure for 2022. Redress schemes can also expel agencies, and as letting agencies have to belong to a redress scheme, being kicked out effectively stops them from trading legally.
Creating a new regulator would give the industry a single body responsible for raising standards that could take over the duties of current Client Money Protection and redress schemes. As pointed out in the Regulation of Property Agents (RoPA) Working Group report, it would also be able to take complaints from people other than landlords and tenants, such as other agents, accountants or internal whistleblowers – none of whom are covered by existing redress schemes.
What are the next steps?
Once the Industry and Regulators Committee completes its evidence-gathering sessions, it will pass along its recommendations to the government – and is expected to recommend that the estate and lettings sector be regulated.
Their evidence will also add to the wider debate over how estate and letting agents should be regulated. Last month, Labour’s Shadow Minister for Housing and Planning added an amendment to the Leasehold and Freehold Reform Bill that would require the government to implement the recommendations of the RoPA report. Property industry figures have also clashed over what qualifications agents should have. And if the current government doesn’t regulate agents further, Labour have said that they will press ahead if they win the next election.
Other estate and letting agent headlines
University launches UK’s first dedicated estate agency degree – The Negotiator
Banks closing pooled client accounts – agents urge government action – Letting Agent Today
Fraudster who posed as letting agent to scam couple handed 10-month jail sentence – Property Industry Eye
