Government hints at more regulation for letting agents

The government has confirmed further regulation for letting agents as it clarifies deposit rules for agents.

In a written parliamentary answer, Baroness Taylor of Stevenage warned that deposit protection scheme membership should not be mistaken for accreditation.

The news comes as the government will publish a non-statutory Code of Practice for letting agents later this year.

Further regulation of the property agent sector

Baroness Taylor of Stevenage said: “Letting agents and property managers in England are required to belong to a government-approved redress scheme. Landlords or agents who take a deposit in relation to an assured periodic tenancy must protect it in a government-approved tenancy deposit protection scheme.

“Membership of a scheme and protection of a deposit is a requirement of trading, rather than a wider accreditation of an agent’s conduct or legitimacy.

“The government recognises the harm caused when fraudulent operators misuse legitimate schemes. Following recent cases, the Department has worked with tenancy deposit protection providers to strengthen safeguards, including adding a fraud disclaimer to insured deposit protection certificates, enhancing tenant communications about tenancy fraud, and reviewing verification and due diligence checks

“We are actively working with National Trading Standards, redress schemes and other approved government schemes to consider whether further verification requirements are needed. My department is also exploring options for further regulation of the property agent sector.”

Mandatory qualifications for letting agents

The news comes as the government unveiled a major overhaul of the homebuying system, including plans to introduce compulsory sales packs containing key information on a property’s condition, leasehold charges and its position within a transaction chain.

Alongside the reforms, a non-statutory Code of Practice is expected to be published later this year, setting out minimum best practice standards for letting agents.

The government has also committed to consulting in 2027 on the introduction of mandatory qualifications for estate and letting agents in England, Wales and Northern Ireland.

Nathan Emerson, CEO of Propertymark, welcomed the government’s commitment to raising professional standards across the sector and urged letting agents to begin working towards recognised qualifications through Propertymark.

He said: “A Code of Practice and mandatory qualifications for property agents are two changes that Propertymark has long campaigned for, and we welcome their inclusion within the government’s proposed homebuying and selling reforms.

“However, with consultation on mandatory qualifications not expected until 2027, there is no reason for property professionals to wait. Agents can take proactive steps now by gaining recognised qualifications and demonstrating their commitment to higher standards.”