A step closer to the regulation of property agents

Propertymark has long called for the regulation and today, 5 March 2024, gave evidence at a House of Lords Industry and Regulators Committee Inquiry which examined whether there should be a new regulator as recommended by the report of the Regulation of Property Agents working group in 2019.

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Our Head of Policy and Campaigns, Timothy Douglas, presented members’ views on the need for an overarching code of practice, minimum qualifications, and licensing for estate agents across the UK and letting and managing agents in England.

The private rented sector is a devolved issue meaning the Welsh and Scottish Governments have already introduced legislation to regulate letting agents.

Watch a recording of the Committee session  →

The limitations of reactive regulation

All regulation in the property sector is voluntary and sanctions are limited to expulsion from a professional body, leaving unethical individuals and businesses to continue operating with no consequences.

Self-regulation and a commitment to high professional standards are important to achieving good outcomes, but without statutory regulation the impact is limited. An effective regulatory regime would allow issues to be prevented before consumers suffer detriment, and the ability to gather high-level data from the sector would allow more targeted measures to improve the sector.

Clarity, consistency and coordination

There are over 150 laws, 300 regulations, and seven government departments that impact the property sector, and legislation is amended regularly. Further regulations entering the sector, such as the Leasehold and Freehold Bill, Renters (Reform) Bill, and Building Safety Act - all increase the knowledge, skills, competency, and responsibility needed to manage property.

Without over-arching regulation, there is no consistency in how this challenge is addressed across the industry and no effective enforcement of common standards.

Professional bodies are already demonstrating good practice, and this must be built upon, co-ordinated and enforced, with those who don’t comply removed from the sector and prevented from operating.

Operating as a property agent is not a straightforward matter, it requires a wide range of skills, the ability to account for substantial flows of funds, and an understanding of complex housing law.

The legislative burden on agents and property managers has significantly increased, but the UK Government hasn’t looked at the competency of the people being asked to carry out those roles.

Consumer protection is vital, and we are at the crossroads now where we have to act.

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Timothy Douglas Head of Policy and Campaigns | Propertymark

The impact of regulation in Scotland

Letting agents in Scotland have been regulated since 2014, and in their Review of letting agent qualifications and CPD in the January 2023 report, the Chartered Institute of Housing outlined that 93% of survey respondents had undertaken an appropriate qualification, and 96% of respondents had met the 20 hours CPD requirements over three years. Out of these, 87% of letting agents who had done a qualification said they felt a positive impact on their professional capabilities. Furthermore, 84% of letting agents said the introduction of qualifications has been positive for the sector overall, highlighting more people looking at property agencies as a long-term professional career option.

Propertymark campaigning

Regulation is a key campaign and policy area for Propertymark and its members, who support the introduction of mandatory requirements for letting agents in England and for sales agents across the UK.

Propertymark was part of the ROPA Working Group which published its report in 2019. Since then, the current Conservative Government has continued to say the recommendations are being considered but no formal response to the report has been forthcoming.

Matthew Pennycook MP, Shadow Housing Minister said that a future Labour government would look to introduce the recommendations in Lord Best’s report to regulate property agents.

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12 Oct 2023
Labour are committed to regulation of property agents