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Letting Agents will have to join redress scheme

Letting Agents will have to join redress scheme

Landlords and tenants are finally being offered better protection from rogue letting agents after the House of Commons approved an eleventh hour amendment to the Enterprise and Regulatory Reform Bill.


The coalition government has bowed to pressure from Labour and industry groups by amending the Bill to allow for a system of redress. 

All letting and managing agents as well as those agents engaged in leasehold management must now belong to an approved redress scheme, or ombudsman, which will offer landlords and tenants access to an approved redress scheme in order to deal with complaints when they arise. 

Peter Bolton King, RICS Residential Director, said, “From now on, should a tenant or landlord experience problems due to poor service, they will be able to register their grievance with an independent redress scheme which, if appropriate, will investigate and award compensation.”


The move has been welcomed by various property professionals and industry bodies as a positive step to raise consumer protection by giving access to an independent disputes resolution mechanism and also an opportunity to raise standards across an industry thought to handle £14 billion a year, earning £1 billion for itself in the process.

Property Ombudsman, Christopher Hamer, said, “I have been pressing for such a change for a number of years and I therefore very much welcome the government's approach to this important element of consumer protection.” 

However, while many feel that this is a step in the right direction, there is widespread feeling that further action will be needed to remove all rogue letting agents from the sector, after the Government stopped short of backing an amendment introduced in the House of Lords by Baroness Hayter, the Labour peer who has led the campaign for change.


Caroline Kenny, UKALA Executive, commented, “Whilst well intentioned, the previous proposals that letting agents to be brought within the scope of the Estate Agents Act 1979 fell short of providing a genuine solution.” 
Nevertheless, the Housing Minister’s announcement that the Enterprise and Regulatory Reform Bill will be used to provide a basis for future, specialised regulation of letting agency standards should ensure that landlords and tenants who choose to use professional letting services receive adequate protection.


“The National Landlords Association [NLA] looks forward to working with the Government throughout the forthcoming industry consultation to make sure that any regulation implemented encourages professionalism, provides financial protection and aids the development of a healthy and sustainable private-rented sector,” said Chris Norris, Head of Policy at the NLA. 

Calls for legislation have intensified in the past year or so amid a major shift towards renting in the UK. There are now 3.84 million households privately renting in England, up from 1.9 million in 2001.


Marc Von Grundherr of Benham and Reeves Residential Lettings commented, “Given the increasing move to a renting society with older owner occupiers, we need more rental stock not less and therefore the sector needs to be fully transparent, professional and have redress for all sides. The only way is through regulation.”


Martin & Co St Albans are an ARLA licenced member as well as a member of the Property Ombudsman.