Regulation of Property Agents (RoPA)

Propertymark was part of the working group made up of industry stakeholders and chaired by Lord Best. We have long called for Government regulation to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds (at least) a Level 3 qualification.

RoPA's proposed new regulatory framework is focused on estate agents in 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.

RoPA's report recommends that:

All agencies operating a residential property business should be licensed and licensing should include a fit and proper person test for company directors
All staff delivering ‘reserved activities’ employed within residential agency business should be licensed and adhere to a Code of Practice
All staff delivering ‘reserved activities’ employed within residential agency business should hold a qualification at Level 3 or above
All company directors and management agents should hold a qualification at Level 4 or above
A new regulator be appointed to oversee compliance with an overarching Code of Practice

These are substantial changes which will require agents to start making preparations now to ensure that they are well placed for when these proposed qualification requirements are introduced. While we anticipate that the need for property qualifications will be phased in, we advise agents to get ahead of the competition and to stand out by adopting the new requirements early. Propertymark can support you and your organisation both with getting qualified and preparing for regulation.

Mark Hayward Former Chief Policy Advisor | NAEA Propertymark

This is a significant moment for those in the property industry and a huge leap forward in stamping out bad practice. We have long called for Government intervention to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (A-level). Following the extensive considerations by the working group, it is now for Government to create the structures for a properly regulated industry, whose professional knowledge and skills are trusted and respected by all.

David Cox Former Chief Executive | ARLA Propertymark

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News, Regulation of Property Agents (RoPA), Renters Reform, Evictions, Tenancy agreements, Licensing

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What is the current state of play for estate agents?

Estate agents are not required by law to be licensed or qualified. In Scotland, a solicitor will manage much of the property sale and in England, Wales and Northern Ireland—unless the estate agent is a qualified chartered surveyor—they will liaise with the other professional parties.

Estate agents are principally regulated by the Estate Agents Act 1979 and the Consumer Protection from Unfair Trading Regulations 2008. In addition, all estate agents in the UK who engage in residential estate agency work must belong to a Government-approved redress scheme under the Consumers, Estate Agents and Redress Act 2007.

How are letting agents regulated across the UK?

There is currently no overarching statutory regulation of private sector letting or managing agents in England. Whilst many letting and managing agents submit to voluntary regulation, there is no legal requirement for them to belong to a trade association.

Scotland: registration scheme for letting and managing agents. Read more...
Wales: requires agents to be licenced. Read more...
Northern Ireland: Department for Communities announced (in January 2017) an intention to 'introduce a regulatory framework for all letting agents including bringing forward legislation to ban letting agent fees'.
England: no comprehensive regulation of letting and managing agents.

RoPA FAQs

What were RoPA's aims?

The RoPA working group was created to advise the government on:

a model for an independent property agent regulator, including how it will operate and how it will enforce compliance
a single, mandatory and legally enforceable Code of Practice for property agents
a system of minimum entry requirements and Continuing Professional Development (CPD) for property agents
explore fees, charges and ability to choose a managing agent for leaseholders and freeholders

Who chaired the working group?

The working group was chaired by Lord Best who has been an independent crossbencher of the House of Lords since 2001. He has extensive experience from his years working across the housing sector.

Who participated?

RoPA's working group was made up of a number of property industry and consumer stakeholders: Propertymark, Royal Institution of Chartered Surveyors (RICS), National Trading Standards (NTS), Professor Christopher Hodges from Oxford University, Institute of Residential Property Management (IRPM), Leasehold Advisory Service (LEASE), National Landlords Association (NLA), Citizens Advice and Ombudsman Services

Why now?

UK Housing Minister Heather Wheeler announced in October 2018 that a new working group called RoPA would be established and tasked with advising the Government on a new regulatory framework for letting, managing and estate agents.

The measures are in line with the Government’s consultations on Protecting consumers in the letting and managing agent market: call for evidence and Improving the home buying and selling process: call for evidence.

Why is RoPA recommending licensing?

Professional agents agree that bad practice is detrimental to consumers, agents and the reputation of the property sector. The working group explored a variety of models of regulation, considering the wider context of different professional infrastructure and the financial and emotional consequences of bad practice within the industry.

Licensing would facilitate a structure of regulation, including adherence to a code of practice, a fit and proper persons test for directors and a register of agency licences available to consumers. In turn, this would drive up the standards of service provided to consumers.

We have long argued that piecemeal regulation does not work. A coherent, overarching framework of regulation is essential in order to create a level playing field and remove the two-tier market that currently exists.

Who will the regulator be?

A new, independent regulator must be appointed through a fair and open competition process and be accountable (via a board) to the Secretary of State for Housing, Communities and Local Government. The regulator must be required to report annually on its progress in raising standards through key performance indicators.

The working group stipulated that independence requires that the new regulator’s chief executive must not have worked at a licensable firm in the three years prior to or following their appointment. Furthermore, members of the new regulator’s board must not have been employed by a registerable firm in the three years prior to their appointment.

How RoPA could affect you

Why do individuals need to be licensed, shouldn't the focus be on agencies?

RoPA concluded that while firms can be held responsible for the competence and training of their staff, individuals are the only ones that can hold qualifications. Furthermore, requiring individuals to hold qualifications will bring them into line with other regulated professions. One such example is a qualified lawyer who mismanages confidential information, their licensed status means that they cannot leave one practice and move to another without taking personal responsibility and consequence for malpractice.

While qualifications should not burden individuals with excessive costs or time commitments, they do need to be sufficient enough to demonstrate an individual’s commitment to the profession. There is a consensus among the working group that customer-facing agents should be able to demonstrate the knowledge and skills covered in a Level 3 qualification (equivalent to an A-Level) while company directors actively involved in the business should achieve a Level 4 qualification (equivalent to a High National Certificate).

The group firmly believe that qualifications are the bedrock of raising professional standards in the industry. It is vital that consumers can have confidence in the agent who is dealing with their transaction

Do the recommendations apply to all staff?

The working group recommends that a list of ‘reserved activities’ is created, which only licensed individuals at a regulated firm can perform. Staff carrying out purely administrative work within a regulated firm, who are not interacting with or offering a service to customers should not need a qualification. The suggested starting point this reserved activities list are as follows:

conducting viewings
market appraisals
negotiating with and on behalf of clients
signing contracts
providing direct advice to clients
instructing contractors to undertake works
collecting or handling client money
having responsibility for the health and safety compliance of a property

Will agents have to sign up to one of the existing codes of practice?

The working group has looked at a number of professional codes of practice and outlined high-level principles that a new overarching code should incorporate. The recommendation is for a single set of principles for all agents to adhere to with provisions specific to each discipline. This will ensure that agents understand the expectations and allow clear criteria for breaches. The regulatory code must make clear that agents will have the responsibility to disclose any material breach of standards.

Won't this put off new entrants to the industry?

We believe that raising professional standards and increased respect for property agents will encourage more new entrants to the industry and a higher calibre of candidates. The working group also recommends that apprentices who are working towards their Level 3 qualification should be permitted to work in the industry under supervision by a qualified member of staff.

What will all this cost?

The working group has emphasised throughout discussions that the industry cannot bear excessive costs in the context of depleted stock, market uncertainty and wave upon wave of legislation—not least that of the Tenant Fees Act and measures around referral fees.

It is essential that the Government allow sufficient lead-in time to give thousands of staff, currently working at varying levels, the time needed to take and pass a qualification. As long as the regulator ensures the syllabus is relevant to practice, experienced agents should have no problems in achieving the required qualification at a limited expense. Costs for taking exams should be affordable for those wanting to work in a professional environment but the sooner that individuals make a start, the better.

Is my existing qualification applicable?

The regulator will set the syllabus for accepted qualifications to meet and until the syllabus is set, no qualification can be marketed as fully compliant. However, the working group recommends that where an individual holds an existing qualification below the specified level, that they be allowed to make up the difference between that and the required standard.

Many agents already hold a qualification at Level 3 (Level 6 in Scotland) or higher than the proposals require. We are confident that agents in possession of established, Ofqual Regulated Level 3 qualification—like those offered by Propertymark Qualifications—will have a significant head start in being ready for regulation.

Regulation of Property Agents Working Group (RoPA)