REGULATING PROPERTY AGENTS WILL RAISE STANDARDS
The Government has announced its intention to introduce a nationwide system of regulation for estates and letting agents. It’s been talked about for years, but with a rising number of complaints raised with property ombudsmen and a 2018 Which survey revealing that 64% of recently-moved tenants had experienced problems with their letting agent, the Government felt the need to act.
At present, there are no requirements for an estate agent to be qualified. Given the significant financial ramifications for consumers buying or selling a house, this always seemed out of kilter with the related professions of solicitors and accountants. A working group set up under Lord Best has reported its recommendations this month, and it is difficult to argue with many of the conclusions. It suggests that since the average person only moves house every 19 years they are unlikely to have any expertise in the field, and little idea how to identify a professional agent when they come to market their home. In an imperfect market, it recommends, the Government should legislate the unscrupulous agents out of the market.
Estate agents are now required to be a member of a registered property redress scheme so that complaints against them can be adjudicated, but wider control of estate agent activity is handled under a mishmash of primary legislation, trading standards and industry self-regulation. The new proposals seek to bring these disparate elements under a single regulatory umbrella.
This is not regulation for regulations sake. A professionally qualified agent has a proven skills base, providing a mark of competence which prospective clients can be assured of. A formal qualification reinforces an agent’s commitment to the industry and dissuades those who are merely out to make a quick buck from entering the market.
The working group is calling for a new Regulator, who would be responsible to the Minster for Housing for regulating and licensing estate agents and their staff. It recognizes that not all levels of staff will require the same level of qualification, and recommends a staircase of qualification, rising with experience and seniority. Whereas regulation to date has essentially been reactive, ie addressing things that have already gone wrong for consumers, the new Regulator would have the power to establish codes of practice and enforce and police the new system with a sliding scale of warnings, fines, licence suspensions and revocations and, if necessary, prosecutions. They are also likely to publicise infringements, so that members of the public can be on notice of transgressors.
At Quay Living, we have long-favoured the professionalization of our industry. Quay is Regulated by the Royal Institution of Chartered Surveyors, as well as being members of Propertymark, the Association of Residential Letting Agents and the National Association of Estate Agents. We are also members of the Property Redress Scheme. As you would expect, we firmly believe that the general public is entitled to protection from agents who do not have the best interests of their clients at heart. Let’s be honest, we also long for the day when we can answer the question “what do you do for a living?” without having to witness the eye-rolling cynicism which members of our profession have faced for too long!
The Recommendations of the Working Group are now with the Minister, so it will be interesting to see how closely the Government chooses to mirror its draft legislation in those recommendations. Given recent experience of the Tenant Fee Ban, the likelihood is it will come forward with most of the recommendations intact, and be well supported by all sides.
Duncan Challis MRICS is a Chartered Surveyor and Partner of Quay Living