Four reasons for regulation:
- Provide qualifications and continued professional development for professionals working in the sector
- Protect public safety when combined with adequately resourced enforcement
- Deliver greater levels of consistency and a joined-up approach
- Safeguard consumers from receiving a low quality of services
Outside of regulatory requirements for letting agents in Scotland and Wales, there are no minimum standards to work in the sector and there are no statutory rules to ensure letting agents are suitably qualified. Additionally, agents who are not members of a professional body do not have to meet minimum competency standards.
Regulation across the UK
The requirements—which mirror Propertymark’s membership criteria—aim to drive-up standards in the industry, improve the quality of property management for tenants and eliminate those rogue agents who bring the industry into disrepute.
When Rent Smart Wales first announced a £3,728 licensing fee for agents, we branded this unfair given it did not consider the size of a letting agent business. This meant both the smallest and largest agents would be charged the same fee. Under the Freedom of Information Act, we requested an explanation as to how the Licensing Authority arrived at the £3,728 fee.
Propertymark was a member of the UK Government’s Regulation of Property Agents (RoPA) Working Group. This was a small group of industry stakeholders set up to examine several key industry issues including regulation and qualifications.
The Group’s final report outlined some key recommendations for regulation:
- All agencies operating a residential property business should be licensed and licensing should include a fit and proper person test.
- A new regulator to be appointed to oversee compliance with an overarching Code of Practice.
- Staff delivering ‘reserved activities’ should be licensed and adhere to a Code of Practice.
- All staff delivering ‘reserved activities’ should hold a regulated sector qualification to a minimum of Level 3, preferably with directors qualified to Level 4.
The Ministry for Housing, Communities and Local Government (MHCLG) has released a report on the recommendations of the working group proposals for a new regulatory framework to cover estate agents across the UK and letting and managing agents in England.
Propertymark has responded to the Overarching Code of Practice for Residential Property Agents consultation, welcoming the proposals, and calling for the Code to be strengthened in four key areas to further support the industry.
Propertymark has submitted a joint response to the Government’s consultation on strengthening consumer redress in the housing market by calling for an ombudsman portal for housing-related complaints with one ombudsman for private housing and another for social housing.
We are supportive of the Government's idea of addressing the imbalance of power in the private rented market by regulating letting agents and have put forward how we believe regulation should work.
In January 2017, the Department for Communities proposed in its consultation paper ‘Private Rented Sector in Northern Ireland: Proposals for Change’ to introduce a new regulatory framework for all letting agents.
Following the re-forming of the Northern Ireland Executive in January 2020, Propertymark continues to push for reform as part of the Virtual Housing Panel.
In January 2017, the Department for Communities published proposals for significant changes to the sector including introducing Agent Regulation, subjecting all unfit properties built before 1956 to rent control and banning letting agent fees.
The Scottish Government have achieved a much better balance of agent regulation than what was introduced in Wales. Rent Smart Wales looks at training and the registration of property, whereas the focus of the Scottish Government’s agent regulation is to ensure that every agent involved in lettings has the right skills to do the job.
They have however created an administrative registration process which essentially duplicates the work already done by professional bodies. Whilst it is much less onerous than Rent Smart Wales, we continue to question its necessity when they could require that all agents are members of an approved professional body who would take on this administrative burden themselves.
The Scottish model reflects existing good practice in the industry and is the most sensible form of agent regulation that we have seen so far; however, there can be further improvements to reduce bureaucracy and ensure robust consumer protection whilst simultaneously re-purposing resources from administration to enforcement.
For England, Propertymark welcomes the recommendations of the RoPA Working Group and we believe that the UK Government must come forward with proposals to implement them in England as soon as possible. In December 2020, when asked about the issue, Kelly Tolhurst, the then, Parliamentary Under-Secretary for Housing, Communities and Local Government, said 'We established a working group, chaired by Lord Best, who looked at this alongside the regulation of property agents and reported back to Government last summer. We are currently considering their recommendations'.
We highlighted the importance of regulation within the property sector and divergence in rules across the UK in response to the Department for Business, Energy and Industrial Strategies consultation.
Related news and resources
On 20 October 2021, the House of Lords debated the UK Government’s plans to implement the recommendations of the Regulation of Property Agents Working Group, published on 18 July 2019.
Major concerns for the property sector have been reiterated in letters issued by Propertymark to outline actionable points for levelling up our country and communities.
Requirements and expectations have been clarified in an update provided to Scotland’s private rented sector (PRS), particularly on training and registration.