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Category: government and politics
In a recent development, the House of Lords Industry and Regulators Committee has issued a stern call to the government, urging immediate action to act on existing plans for more regulation of property agents to protect landlords, tenants, and other stakeholders.
This call comes four years after the government initially committed to do so, highlighting the prolonged delay and its detrimental impact on tenants, landlords and other stakeholders within the lettings industry.
The committee's letter, addressed to Housing Secretary Michael Gove, underscores the pressing need for regulatory measures to safeguard consumers and address prevalent issues of malpractice within the sector.
The committee heard from leasehold-campaigners, leaders from property professional bodies and heads of regulatory services. After conversations between these groups on the state of the property agent sector, a wide range of recommendations were made.
The recommendations made by the committee
One of the primary recommendations put forth by the committee is the establishment of a property agents' regulator, tasked with driving up standards and proactively enforcing against agents engaging in poor practices.
Currently, enforcement mechanisms are deemed ‘reactive and limited’, failing to adequately address grievances and uphold consumer rights.
Moreover, the committee emphasises the necessity of mandatory qualifications for property agents, alongside industry codes of practice to ensure ethical conduct and favourable outcomes for consumers.
The call for a single ombudsman for property agents, as opposed to the current system of two competing schemes, aims to streamline redress processes and enhance accountability within the industry.
In addition to establishing a new regulator, the committee advocates statutory consumer representation in the sector, to amplify consumer voices and ensure their concerns are adequately addressed.
The letter mentions Rebeca Marsh, leader at the regulatory service The Property Ombudsman, when she is asked whether she would support consumer regulation in the form of an official register of qualified practitioners:
We have the vulnerable landlords as well as vulnerable tenants who we have to take account of when we are working. We have so many people involved in this. This is a people business. It is really important. However we frame it, that consumer representation is crucial, but we must be careful that it is effective consumer representation
Comments from those involved
Baroness Taylor, Chair of the Industry and Regulators Committee, expressed dismay over the government's lack of action, stating:
During our inquiry, there was near unanimous evidence from consumers, industry and existing bodies on the need for statutory regulation of property agents and the establishment of a new regulator.
The government has been sitting on its hands for four years, by not acting on the report of the Working Group it set up. In the meantime, the impact on poor regulation is being felt by tenants and leaseholders, and the sector has been left in limbo.
I have also expressed to the Secretary of State that we would have appreciated a minister from his department providing oral evidence to the inquiry.
Furthermore, a ‘Memorandum of Understanding’ between regulatory bodies and redress schemes is proposed to facilitate cooperation and mitigate duplication of efforts.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, echoes the committee's sentiments, emphasising the critical need for overarching regulation to protect consumers amidst evolving legislative frameworks.
He asserts, "The UK government must not miss the opportunity to act on the recommendations... and build in greater protections for consumers."
As calls for regulatory reform intensify, the House of Lords have urged the government not to delay any further, emphasising the need to put in place a robust regulatory framework to instil confidence and integrity within the lettings industry.
The failure to act is seen as extending an ongoing pattern of poor regulation and consumer vulnerability.
