Rogue letting agents may find that their days in the rental industry may be numbered, after the House of Lords voted in favour of regulating the sector.
Last week, 211 peers backed a Labour party amendment to the enterprise and regulatory reform bill, which would force letting agents to sign up to a redress scheme for any landlords or tenants who felt they had been deceived.
Unlike estate agents, letting agents are unregulated, despite the large amount of money they routinely handle.
The Property Ombudsman, Christopher Hamer, estimates that the letting industry is now a £1 billion per annum business, with letting and managing handling some £14 billion per annum of clients’ money.
If the House of Commons supports the proposed change in the law, letting agents will be included in the remit of the Office of Fair Trading, which will have the power to ban rogue letting agents as wll as those in sales. Additionally, it will mean that sales agents who have been banned from trading will not immediately be able to set up a new business as a lettings agent.
The Royal Institution of Chartered Surveyors (RICS), ARLA and The Property Ombudsmanare among a wide range of professional organisations to welcome the decision in the House of Lords to introduce this amendment in law to help protect tenants and regulate the lettings industry.
These organisations and others have long campaigned for the regulation of the lettings industry, working with MPs and Peers to highlight problems and inconsistencies in current legislation which is having a detrimental effect on consumers and business.
Peter Bolton King, RICS Residential Director commented, “RICS has long called for the regulation of the lettings industry, given that ultimately, this is about the provision of shelter, a basic human requirement. This decision is one step nearer to this vital change becoming law.
Ian Potter, ARLA Managing Director added, “We all look forward to working with Government on the Bill as it moves back to the Commons for final approval".
Martin & Co St Albans and many other letting agents themselves also support the proposed amendment to the law.
Marc Von Grunherr of London-based Benham & Reeves commented, “I feel there should be regulation that firms should be members of BOTH types of professional bodies, like ARLA and The Property Ombudsman. There are so many crooks out there and it is essential that something is done to protect tenants and landlords. Agents like ourselves are forced to compete with agents who have no costs, are members of nothing and operate from home. This is wrong.”
If the planned amendment is approved by the House of Commons, the new law could reportedly come into effect as early as next spring.