Entire Property Industry to be Regulated

The Government has published a report outlining it;s plans to regulate ALL Property Agents and, in our opinion, it’s about time!

The full story was published in ‘Property Industry Eye’ on 18th July…

A new era for the entire agency sector begins today, with the publication by the Government of a report calling for minimum standards, a single code of practice, and licensing of agents, with the regime to be overseen by a new regulator.

Agents have been urged to start preparing now for the new era.

The official report, from the Regulation of Property Agents working group and published today, is far-reaching, covering lettings and sales, auctioneers, rent to rent providers, property guardians, international property agents, and online-only firms.

The new regulator would also have powers over the leasehold sector.

The new over-arching code of practice will be enshrined in statue, requiring agents to act with honesty and integrity. Underneath it, regulatory codes will operate, specific to different activities.

The new regulator – the report says that no existing body should take on the role – will be accountable to the Secretary of State and be funded by the firms and individuals it regulates. Importantly, the new regulator will have the power to appoint a single ombudsman if it believes this would be better than having “competing redress schemes”.

The regulator will have the power to issue warnings, revoke licences and prosecute unlicensed practitioners.

On licensing, the report says: “To confirm appropriate qualifications and credentials, property agencies and qualifying agents should be required to hold and display a licence to practise from the new regulator.

“Before granting a licence, the new regulator should check that an agent has fulfilled its legal obligations (such as belonging to a redress scheme and submitting a copy of their annual audited accounts to the new regulator) – and that they have passed a fit-and-proper person test.

“We recommend that the new regulator should be able to vary licensing conditions as it sees fit and that it maintains accessible records of licensed property agents.”

The report also suggests that once the regime has settled, it could be extended to cover self-managing landlords, developers, Right to Manage companies, and possibly tenancy deposit and client money schemes. However, the report says that regulation should not extend to property portals such as Rightmove or to the short let sector, such as Airbnb.

Propertymark said it heralded a new culture for the industry.

Mark Hayward, NAEA chief cxecutive, and David Cox, ARLA boss, said in a joint statement: “This is a significant moment for those in the property industry and a huge leap forward in stamping out bad practice.

“We have long called for Government intervention to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (A-level).

“Following the extensive considerations by the working group, it is now for Government to create the structures for a properly regulated industry, whose professional knowledge and skills are trusted and respected by all.

“These are substantial changes which will require agents to start making preparations now to ensure that they are well placed for when these proposed qualification requirements are introduced.

“While we anticipate that the need for property qualifications will be phased in, we advise agents to get ahead of the competition and to stand out by adopting the new requirements early.

“It may feel like this is in the distant future but bringing every property agent into a new regulatory regime will involve a significant change in culture across the industry.”

Isobel Thomson, chief executive of safeagent, formerly NALS, described the report as “a blueprint for a professional regulated property sector which, if fully implemented, would ultimately offer consumers the same level of protection they already experience in other areas of their everyday lives”.

She added: “We also welcome the focus on the need for effective enforcement which has always been the missing link when it comes to delivering what new regulation promises.”

The report recommends that the short let sector is not encompassed in the scope of any new regulator but Thomson warned there should be a focus on this area of activity as consumers are vulnerable and potentially at risk if it sits outside regulation.

The National Landlords Association also welcomed the report.

CEO Richard Lambert said: “We hope that the proposals outlined in the report will drive forward the professionalisation of the private rented sector, making it a better place for those who live and work in it. We were particularly pleased that the report went beyond simply looking at activities and placed a new emphasis on the importance of ethics and behaviour.

“But the new regulator will be toothless if the Government continues to fail to provide the resources to enforce existing legislation, let alone any new requirements.”

The Government set up the Regulation of Property Agents (RoPA) Working Group – chaired by Lord Best – last November.

It said this morning that it will review the recommendations and “respond fully in due course”.

Housing minister Heather Wheeler said: “Everyone should be able to have full confidence in their property agent when selling or renting a home.  Whilst the majority of agents offer a good service, it’s high time we take action to tackle a minority who are letting the sector down.”

Professional Properties Managing Director, Susan Cope, commented “I think it’s necessary, I think it’s good, we’ve always trained our staff, we’ve had external trainers and since we’ve known that they’re going to have to have this particular qualification, we’ve already started working on it in September last year, so all of the staff will be going through that now.”

Daren Cope also said “Personally I think it’s fantastic as well, a massive step forward in getting rid of bad practice throughout the industry, not just our industry, as Susan said it’s estate agency, auctioneers, and especially, the leasehold sector as well. Also the real pleasing part for me is that, the report not only looks at the activities of the business, what they’re actually doing, but also, the ethical side of it, and how these agents behave, which sometimes leaves a lot to be desired. We’re obviously doing our training at the moment, and we’ll carry on doing that.”

Simon Joyce states “It’s great news for the industry, my only reservation really is the ability to police it all, and let’s face it, the authorities haven’t really got a great record of upholding the legislation. As of April 2015, all agents must display their fees on their website, and there’s still agents still not doing it now, or even in the offices for that matter.”