Every landlord and property investor has a story about how useless letting agencies and their staff can be.
While this makes for good dinner table raconteur material, and indeed the lack of regulation of the industry means the worst operators rarely face the music, things are hotting up on this front.
Because while moaning about your letting agent over coq-au-vin and a glass of Sauvignon is a favoured pastime among some landlords, scrutiny of letting agents is due for a major overhaul as it becomes a political hot pomme-de-terre, spurred on by Labour’s love of the emboldened campaigning charities such as Shelter and Generation Rent.
There are several other reasons for this renewed spotlight – something landlords should celebrate, as it means some of the letting industry’s less-than professional players who can cause landlords so much grief will be ejected.
Renters’ Rights Act
The first reason is that the soon-to-go-live Renters’ Rights Act requires letting agents to comply with a much wider range of responsibilities, and housing minister Matthew Pennycook has made it clear on multiple occasions that he intends to better fund local councils so that they chase down the non-compliance of these new rules.
Examples of these include a ban on encouraging competitive bidding among prospective tenants, ending ‘blanket bans’ on tenants with pets, on benefits or with children, and a new Decent Homes Standard.
Secondly, recently, the Lords’ housing minister Baroness Taylor confirmed that new legislation to regulate letting agents and property managers will be revealed later this year.
This will include minimum qualifications for agents, which should eliminate some of the clueless agents you meet at viewings who have no idea about the regulations or sensibilities that being a landlord involves.
One example was a young agent I met recently from a major national upmarket London agency who wasn’t aware that if my property was rented out to more than three unrelated tenants, it would have to be classed as an HMO.
Inexperience can prove expensive
This sort of ignorance used to be shocking, but for some landlords who don’t pick up on this kind of inexperience, it can also be seriously expensive.
Landlords face increased fines and rent repayment orders of up to £40,000 for relatively minor non-compliance with many aspects of both existing local licensing laws and the new measures within the Renters’ Rights Act.
The good news is that the lettings industry as a whole is waking up to the both the likely bear traps this legislation presents if they don’t up their game on compliance so, even if the Government drags its feet on agency regulation – which is likely given the way parliament works – increasingly, risk-averse landlords will begin scrutinising their current and any future letting agencies much more to in order work out how on ‘on the ball’ they really are.
Many landlords once used letting agencies to manage their properties because they lived abroad or were too busy to do it themselves, and only worried about regulation as an afterthought – but I think that’s going to change.
