R

R ES I D EN TI AL
PRI VAT E RE N T E D S E C TOR

Is it time
for regulation?
Andrew Bulmer, RICS UK Residential Director, talks
to Les Pickford about the status of regulation in the
private rented sector and why it should be improved
round half of UK
agents are regulated
by a professional
body, according to
Andrew Bulmer. The
rest are unregulated,
providing limited
consumer protection, if any, he says.
Estate agents selling houses are
covered by the Estate Agents Act 1979
but the average consumer is unlikely to
know this doesnt cover lettings. There
was a recent case of someone who was
banned from practising as an estate
agent under the Act but could continue
as a letting agent.
Legal requirements are changing soon
with the Department for Communities and
Local Government (DCLG) announcement
that all letting agents will need to belong
to a scheme of redress a very welcome
development, he believes.
However, there are already some
safeguards in place, he adds. An
important part of the existing framework
is the RICS UK Residential Property
Standards (the Blue Book). This has
been endorsed by bodies such as the
National Association of Estate Agents,
the Association of Residential Letting
Agents and the Association of Residential
Managing Agents and member firms will
be judged against it at tribunal or court.
Regionally, Bulmer says, the picture
is fragmented. Wales is investigating
mandatory registration of landlords and
agents, while compulsory registration of
landlords already exists in Scotland. The
London Borough of Newham requires all
landlords to register, with other boroughs
looking at this example.

Whats the impact?

Agents are often voluntary members of
regulatory bodies, such as RICS, so can
demonstrate that they are one of the
good guys, Bulmer says. Enlightened

Mandated
regulation would
mean proper
protection for
tenants and
landlords and an
upskilled letting
industry
agents also think that trained and
qualified staff generally work more
efficiently and make fewer mistakes.
However, he adds: Landlords and
tenants often dont understand the
difference in how theyre protected with
regulated or unregulated agents; for
example, regarding a scheme of redress
and client money protection. A landlords
first question to an agent is usually about
how much they charge, while tenants
usually choose the property they prefer,
not the agent that is safe; perhaps the
most compelling argument for protecting
the consumer by introducing mandatory
regulation of all letting agents.

Industry initiatives
Bulmer says that most landlords are
small scale; 72% own just one property.
In an effort to address the housing
shortage, the government stimulated
institutional investment on larger
build-to-rent developments. However, it
was concerned that the poor reputation
of the private rented sector could be a
barrier to this investment and so asked
RICS to facilitate the cross-industry
PRS Code of Practice for the lettings
industry to be published this summer.

RI C S P RO P ERT Y
J O U RN A L

Announcing the PRS Code in April,

Housing Minister Kris Hopkins said it
was with a view to making it statutory
to provide greater confidence for tenants
in what they can expect.
Practitioners would be judged against
the Code when in a court or tribunal,
explains Bulmer. If approved by the
Secretary of State, then irrespective of
whether or not they were a regulated firm,
the agent would need a very good reason
for not following the Code.
Other DCLG plans include a
How to Rent guide (covering the rights
and responsibilities of tenants and
landlords), improvements to the eviction
process and a family friendly agreement
for longer tenancies.
Meanwhile, the Labour party has
announced that it wants to see mandatory
longer tenancies with some form of rent
increase limitation at rent review. Industry
is awaiting the detail of the schemes but
has voiced concerns of a reduction in
supply of private rented sector homes
should institutional investors be deterred
and/or smaller landlords lose confidence
and exit the market.
Labour has also called for a ban on
letting agents fees to tenants; a move
rejected by RICS, which believes that the
more recent proposed amendment to the
Consumer Rights Bill (requiring agents to
transparently disclose their fees up front
to tenants) will provide the necessary
protection without compromising the
viability of responsible, regulated firms.

New regime
I believe that all letting agents
should belong to one of the regulatory
bodies and, importantly, achieve a basic
minimum qualification to demonstrate
they are fit to practise, says Bulmer.
Mandated regulation would mean proper
protection for tenants and landlords and
an upskilled letting industry. This would
help to drive out rogue agents, to the
betterment of consumers, landlords and
the private rented sector housing stock
in the country. R

Les Pickford is a freelance writer and editor

lespickford@yahoo.co.uk

Related competencies
include Leasing/letting,
Conduct rules, ethics and
professional practice

J U LY/A U G U S T 2 0 1 4

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