Letting agents to be regulated but doubt remains over leasehold reform

The move was welcomed by the British Property Federation. Ian Fletcher, director of policy at the BPF said, “We hope that the Government will now work with the wider sector to put in place clauses it feels it can support. As with any legislation it is important that we get the detail right, and that it recognises good agents that follow existing schemes, while ensuring that those following poor practice are brought within the law.”

The amendment comes after years of behind the scenes lobbying, including the BPF unsuccessfully tabling a similar amendment in 2007 to the Consumer, Redress and Estate Agent Act.

Estate agency has been regulated since 1979, and this was enhanced in 2007, but letting agents have never been within those provisions. This creates the odd situation where parts of agent’s businesses are regulated and parts are not, and with large sums of money collected by letting agents, it leaves landlords and tenants exposed. It also means complaints against letting agents are not referred to an Ombudsman, unless firms join up to a self-regulatory scheme. With the rapid growth in the private rented sector these issues are coming ever more to the fore.

Baroness Gardner also tabled several amendments affecting leasehold property management but was forced to withdraw them for the time being by Viscount Younger (representing the Government). Previously, he had explained: ‘While we acknowledge that there are issues that need addressing, we do not believe that the answer is to regulate letting and managing agents.... The regulatory burden could be substantial, adding to costs borne by landlords and, in turn, tenants.’ He further explained that the Government did not believe that Baroness Gardner proposed amendments “would achieve her goals”.