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Could letting agents face more regulation?

In January 2024, an amendment was proposed by the Opposition to the Leasehold and Freehold Reform Bill seeking to bring into effect the recommendations of the Regulation of Property Agents Working Group (RoPA), which would further regulate letting agents beyond basic consumer protection.

In 2017, the Government announced that action would be taken to regulate letting agents. The following year, RoPA was set-up and a model for further regulation was recommended in 2019.

In addition to consumer protection and Client Money Protection regulations that were already in place, RoPA recommended a mandatory Code of Practice, an independent regulator and minimum entry and training requirements.

Legislation to a similar effect was introduced in Scotland in 2014 and, according to research by the Chartered Institute for Housing, has been associated with improved standards in the Private Rented Sector.

46% of landlords in England use a letting agent

According to the English Private Landlord Survey, 46% of landlords in England use a letting agent for letting services and 18% for management services. These percentages are replicated to some degree in other parts of the UK.

Varying levels of service

A 2022 study by CaCHE, funded by the TDS Charitable Foundation, revealed that letting agents can play an important role in influencing landlord behaviour. Not only can they improve housing outcomes and standards, they can also function as educators, encourage compliance and influence key decisions, such as rent setting and tenant selection.

Whilst most landlords were found to have satisfactory experiences with their letting agents, the CaCHE study discovered that a significant minority of landlords (20%) were either ‘unsatisfied’ or ‘very unsatisfied’ with their experience of using a letting agent.

Other reports have indicated varying levels of service from letting agents.

Propertymark has argued that greater regulation would drive up standards and eliminate bad practice in the sector.

Amendment to the Leasehold and Freehold Reform Bill would increase regulation of letting agents

The Leasehold and Freehold Reform Bill seeks to improve home ownership for leaseholders and freeholders by making it easier for leaseholders to extend their lease or buy the freehold of their house or flat. An amendment, laid by Shadow Ministers of the Public Bill Committee, proposes that RoPA’s recommendations should be introduced within two years of the Bill becoming Law.

The Bill currently awaits Report stage where the Committee’s amendments will be considered. Opposition amendments are rarely successful but if the Government accepts the Shadow Ministers’ amendment, then a change to the Bill may be proposed to further regulate letting agents.

Whether or not the amendment is successful, it is indicative of Labour’s intention regarding the regulation of letting agents in the run up to the next election, which must be held by 28th January 2025.


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