Government Urged to Get to Grips with Letting Agency Regulation
Letting agents and landlords largely welcome plans to ban letting
agency fees, but are fed up with the Government's failure to properly regulate
Earlier this month the government finally launched the consultation period on its letting agent fee proposals. Originally announced in the Autumn Statement, the proposal aims to ban letting agents charging fees in an attempt to weed out some of the less scrupulous agents from the sector.
Letting agents have been largely welcoming of the change and are happy with any move that is likely to penalise the few letting agents that give the industry a bad name. However, what letting agents are less happy about is the government's inability to implement a proper enforcement system that is focused on finding and rooting out the crooks and not penalising those agents and landlords that provide a good service.
The proposals as they stand
The government is considering a blanket ban on all fees so that no agent is able to 'charge tenants any fees, premiums or other charges that meet the general definition of facilitating the granting, renewal or continuance of a tenancy'. The government is also proposing to ban fees charged by landlords or other third parties, with the main principle of the proposals being that: 'tenants should only be required to pay their rent and a refundable deposit.'
The proposals suggest that the ban should be enforced by local authorities and Trading Standards. Possible penalties for non-compliance include a maximum fine of £5,000 or a civil penalty of up to £30,000. However, there are also other avenues that are being explored to reduce the financial burden on tenants which have drawn criticism from letting agents, landlords and industry associations.
An over-arching system needs to be agreed
The widespread criticism is focused on the government's complete inability to get to grips with regulation in the sector. The head of policy at the National Landlords Association, Chris Norris, explains: "Yet again, the government has published plans to tackle a particular element of the letting agency market, while at the same time suggesting other areas it might like to look at in the future.
"It is about time landlords and agents were given some clarity about the market's regulatory future, which could be easily achieved by agreeing an over-arching system of regulation for letting agents once and for all.
"We're particularly concerned that the scope of this consultation appears to have drifted to include tenancy deposits, with suggestions that a cap may now be necessary. This looks like yet another attempt to affix a sticking plaster to a perceived problem without really understanding what is driving behaviour in the real world."
Agents and landlords are drowning in regulations
The constant stream of changes over the last few years is making it difficult for letting agents and landlords to run their businesses. While regulatory changes that level the playing field for tenants and improve the quality of agents and landlords are welcomed, the constant policy interventions make it almost impossible to plan for the future.
The publication of this consultation in isolation, at a time when letting agents are awaiting further proposals on the requirements for all agents to hold client money protection insurance, is clear evidence that the government doesn't have a clear vision for the sector.
Ultimately, while many of the changes being made are to protect private tenants, the government also has to be aware that any more fees passed onto landlords will simply lead to higher rents. This will make it more difficult for tenants to rent properties privately at a time when there is very little access to affordable housing elsewhere.
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