The Property Ombudsman (TPO) scheme has pushed on behalf of the Lettings industry to make Client Money Protection cover (CMP) available to all UK lettings agents.
Up until this month, CMP cover was only available through a number of trade bodies. The introduction of two new CMP providers this month will enable letting agents that are not registered with a trade body to sign up for cover.
Gerry Fitzjohn, Chief Operating Officer of TPO said:
‘We need an even playing field for lettings. All agents are required to hold client money in a separate Clients Account but there is no current requirement to have those funds insured against unlawful use or fraud, which is why CMP is crucial for landlords and tenants.
‘CMP is not a duplication of any deposit scheme or professional indemnity cover. It goes beyond that and provides landlord with the peace of mind they need to know that the rent collected by an agent is protected.
‘This isn’t ‘news’ to the thousands of experienced agents that have had comprehensive CMP cover with a trade body for many years and we fully support the ongoing efforts of trade bodies such as ARLA, NALS, RICS and UKALA to improve industry best practice. The new CMP products launched this month by PSR Insurance brokers and Hamilton Fraser Insurance Brokers mean CMP cover is now available to the whole of the market, which can only be a good thing.’
It is estimated that some £23 billion is paid annually in rent, of which £6 – £10 billion is collected by agents on behalf of landlords1.
Press reports over recent months have highlighted a number of cases where landlords or tenant have not been able to recover funds due to them, which were held by agents.
TPO has surveyed 8,000 lettings branches2 to assess the viewpoints of member agents registered with the TPO scheme. The results revealed an overwhelming number of agents backed CMP, with 80% already protected.
Mr Fitzjohn added:
‘We passionately believe that CMP is great for consumer protection and will ultimately result in a reduction in the number of complaints against lettings agents. We know from surveying our own agents that the vast majority already have cover. For those that don’t, they now have an opportunity to distinguish themselves from any rogue operators by showing landlords and tenants that they have the appropriate cover in place.
‘My personal viewpoint would be to question why a letting agent would not support CMP. In the absence of any regulation for the UK private rental market, agents themselves need to take proactive steps to show landlords and tenants that they have taken out the necessary cover to protect rental income.
‘We now need the industry to unite to raise awareness of this issue so consumers understand the value of CMP and we will be writing to each of our TPO registered offices this month to publicise our support.’