Think tank calls for letting agents to be regulated
Think tank the Resolution Foundation has called for letting agents to be put on the same legal footing as estate agents.
It wants the Estate Agents Act to include letting agents in its scope, to give the OFT the ability to ban them. It says that such a move would not be controversial, given that the industry itself has called for it.
Vidhya Alekeson, director of research and strategy, said that as things currently stand, the OFT ‘could close you down as an estate agent today and you could open up as a letting agent tomorrow’.
If letting agents were to come under the scope of the Estate Agents Act, they would have to offer redress through an ombudsman scheme. Currently, some letting agents offer this voluntarily but it is not a legal requirement.
Last year, prior to Shelter’s campaign highlighting letting agents’ fees in England, the Resolution Foundation did its own research.
It contacted 25 letting agents in London, Manchester and Gloucester, including national and local brands, and reported on a huge variation in fees.
It found admin fees ranging from £90 to £375, and said that a major problem was that tenants did not know upfront what fees would be charged.
Writing in the Guardian, Alekeson said: “Industry experts argue that there’s a simple solution. Tenants just need to make sure they only use accredited agents. But with the private rented sector now the second largest tenure in our housing market, it is not clear that self-regulation is enough.
“This is not a government that likes regulation – quite the opposite. But there is a case for putting letting agents on the same footing as estate agents to reflect the housing market we now have.”
Tightening the Estate Agents Act to include letting agents would mean that all letting agents would have to offer a redress service through an ombudsman scheme.
The Resolution Foundation is also calling for all letting agents to publish their fees, and in a comparable form.
* Lobbyists who would like to see private letting agents mandatorily regulated may find a more sympathetic ear in new housing minister Mark Prisk than his predecessor.
Five years ago, he tried to introduce a clause into a Bill that would have regulated private letting agents.
The revelation was made by Labour MP Ian Mearns during a debate on housing in the House of Commons, where shadow housing minister Jack Dromey was speaking of Labour’s plans to introduce some kind of ‘effective regulation’.
Mearns said: “Is my Hon. Friend aware that he has an ally in the new minister for housing on the regulation of the private sector? In 2007, he tried to introduce a clause into a Bill that would have regulated private letting agents.”
Dromey replied: “It is welcome that the new minister for housing has taken that position. Perhaps he will follow that through in government.”