Minimum Standards for Letting and Managing Agents
Over 20 per cent of householders in England rent privately, a figure which is set to rise as ‘Generation Rent’ struggles to step onto the property ladder.
High demand for rented housing has fuelled our multi-billion-pound property agent market. This market serves an important role in protecting the value of rented properties and ensuring security of tenants, however its lack of regulation has left tenants exposed to malpractices of rogue agents.
Protecting private tenants from disproportionate fees and burdensome liabilities is not new to the government agenda, and recent announcements suggest that long-anticipated legislative changes are gaining traction.
On 1 April 2018, the Ministry for Housing, Communities and Local Government declared its plans to introduce a mandatory code of practice for both managing and letting agents. Its proposals are geared at professionalising the industry through the following means:
- Implementing a nationally recognised practice qualification for letting and managing agents and requiring at least one practitioner in every organisation to have a higher qualification
- Setting up an independent regulator to enforce the code (with powers to ban from practice those who fall short of required standards) and introducing potential criminal sanctions for serious breaches
- Developing a system to allow leaseholders to challenge unfair fees such as service charges
- Providing support for leaseholders to switch managing agents on the grounds of poor performance or breach of contract
- Requiring all letting and managing agents to undertake continuing professional development and training.
The code will be developed by a working group of agents, tenants and regulation experts, who are tasked with drawing up final proposals in early 2019.
The group will also consult over the necessity of banning unfair charges for administration, use of restrictive covenants and leasehold restrictions. This follows the publication of the ‘Tenant Fees Bill’ in 2017, which proposes to ban letting agent fees and cap tenancy deposits at six weeks’ rent. Legislation to this effect is said to be on hold until “after spring 2019”.
Curious about how the proposed minimum standards discussed could affect you or your business? For further information, please contact Nick Ripper or you can give us a call on 0345 070 6000.