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Lords call on govt to regulate property agents

  • 22/03/2024
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Lords call on govt to regulate property agents
The House of Lords' Industry and Regulators Committee has urged the government to create a regulator for property agents.

The government said it would do so four years ago, but this is yet to be introduced.

The committee wrote to housing secretary Michael Gove to say the delay was “impacting tenants, leaseholders and others, who continue to be exposed to malpractice”.

The committee said evidence submitted revealed that current forms of self-regulation were “reactive or limited in scope” and a regulator would improve standards in the sector.

The Lords committee also found that the Leasehold and Freehold Reform Bill did not adequately address the issues faced by leaseholders, and more regulation was needed.

The committee has suggested the government establish a new regulator or respond to the report that recommended this.

It has also asked the government to introduce mandatory qualifications for property agents, codes of practice and statutory consumer representation.

The government should also approve a single ombudsman for property agents, rather than the two existing schemes, the committee proposed.

Baroness Taylor, chair of the Industry and Regulators Committee, said: “During our inquiry, there was near-unanimous evidence from consumers, industry and existing bodies on the need for statutory regulation of property agents and the establishment of a new regulator.

“The government has been sitting on its hands for four years by not acting on the report of the working group it set up. In the meantime, the impact of poor regulation is being felt by tenants and leaseholders, and the sector has been left in limbo.

“I have also expressed to the Secretary of State that we would have appreciated a minister from his department providing oral evidence to the inquiry.”


Welcomed by the industry

Propertymark and Royal Institution of Chartered Surveyors (RICS) both welcomed the proposed recommendations.

Earlier this month, Timothy Douglas, head of policy and campaigns at Propertymark, represented members’ views regarding the need for a code of practice, minimum qualifications, and licensing for estate agents across the UK and letting and managing agents in England.

Douglas said: “Propertymark welcomes the committee’s findings and its recommendations for greater regulation of property agents. The inquiry highlights the importance of regulation and the need to improve consumer protections. It has also clarified the vital role that professional bodies currently play in providing qualifications and ensuring compliance with rules and regulations as well as taking action to drive up standards across the property sector. 

“As Propertymark made clear through the evidence provided to the committee, it is vital that mandatory qualifications, a statutory code of practice and regulatory oversight exists through a new regulator to ensure compliance with new and impending legislation. The UK government must not miss the opportunity to act on the recommendations of the Regulation of Property Agents Working Group and build in greater protections for consumers. Recent and proposed pieces of legislation for leasehold, renting and building safety are complex and need to be accompanied by overarching regulation that supports and promotes competent and professional property agents.” 

RICS also gave evidence to the committee to highlight the need to avoid duplication of regulation and standards and work with professional bodies to make use of already established regulatory frameworks.

Luay Al-Khatib, director of knowledge and practice at RICS, said: “We are glad to see a growing level of recognition, across the political spectrum and industry, of the importance of professionalism, minimum standards and competency within housing, and the wider property sector. We welcome the report from the House of Lords Committee, which identifies the need to expand professionalism in the regulation of property agents. 

“As well as playing a critical role in the safety and economic management of our national housing stock, property agents have had a significant impact on the day-to-day lives of millions of families who live in leasehold and private rented sector homes.” 

He added: “RICS members are subject to independent regulation, holding them to account against high standards of ethics and technical competency. This delivers exactly the sort of professional framework that Lord Best and the House of Lords Committee report are calling for. 

“However, RICS only has authority over its membership, so there is not a consistent minimum standard across the wider property agency sector. This disjointed picture leads to confusion and low levels of public confidence. 

“For this reason, RICS has been working consistently with industry and government to develop common industry standards in areas such as housing block management and service charge management.

“We hope the government will work closely with us to create a future roadmap for better regulation of agents that has professionalism at its heart and builds on the best-in-class structures we have created. This will maximise cost-effectiveness and pace of transition, and will avoid duplication.”

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