Ministers Rule Out Regulation for Letting AgentsMake Text Bigger
Calls for regulating letting agents have met with a clear message from the government that it’s up to the businesses to clear up their own sector.
Letting agent organisations like the Association of Residential Letting Agents (ARLA) have pushed for a long time for a tightening of the rules governing how letting agents handle client funds.
But the current government has made clear that no more legislation is on the way.
The government prefers a market that self-regulates and gives customers choice. The government also points out that only a third to half of letting agents belong to an industry regulated group.
The call for more regulation came from ARLA in a letter to housing minister Grant Shapps.
ARLA pointed out some recent high-profile cases where letting agents had closed in circumstances that meant customers lost money.
Although every business should take steps to safeguard client funds, letting agents are no different from any other firm that holds deposits, like retailers and builders, who are not regulated.
The suspicion is many of the groups pushing for regulation have a vested interest as they hope they will become an appointed controller that can charge letting agents for belonging to their networks.
In a letter to ARLA, the Communities and Local Government Department said: “The lettings industry is not subject to statutory regulation; however, it is in the interests of the industry to maintain consumer confidence and we look to organisations such as the National Federation of Property Professionals, of which ARLA is a part, to take a lead in that work.
“The department continues to explore how best to counter poor practice by letting and managing agents without resorting to regulation.
“Between a third and a half of agents belong to voluntary schemes which ensure that members have the right protections for consumers in place.
“In view of the well developed voluntary regulation in the sector, ministers do not believe regulation is the answer at present. They are keeping a watching brief, and information about poor practice is always useful in that context.”
ARLA commented that the reply was “not unexpected”.
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