Press Releases
MARKET COMMENT 2 - June 2010
Since the formation of the Coalition government, there have been many sweeping and positive changes, with many more reversals of knee-jerk Acts of Parliament in the offing. Indeed, at the time of writing this article, Lord Young has been appointed to review the Health and Safety laws that have been imposed on us to create a laboratory World where nobody grazes their elbow. At last, common sense seems to prevail!
However, there has been two swift and some say questionable decisions made by Housing Minister Grant Shapps concerning the lettings market in the last few days: the rejection of the national register of Landlords and the regulation of letting agents.
Understandably, one of the Coalition’s major tasks is the removal of the reams of red tape introduced by the previous administration as a time and money saver for Government departments, business and private individuals and nobody could really argue with that approach.
However, if the two decisions that directly affect the quality of the lettings market were made simply as a red tape eradicator, then those decisions were ill-considered and misguided.
Registering landlords and bringing as many as possible to a defined standard could have been a cheap and almost paper-free exercise. It would have mitigated many of the complaints landlords justly or unjustly receive in the press and elsewhere, would have educated landlords and would definitely have plugged one of the gaps in the Inland Revenue’s black hole.
Following similar lines to that of Scotland’s regulation of landlords, the process could have been cheap and simple: registration online, with a small subscription, paid to and administered by local councils where the properties are situated. This would have created a database of landlords and the increased administration paid for by the local councils.
In Scotland, it hasn’t been a complete success story: many landlords have failed to register, leaving the Scottish Parliament with a major investigation task. This could have been prevented by better quality planning at the outset, quality and regular marketing of the legislation prior to release, then policed by the local authorities.
As for regulation of letting agents, this seems to be a major ball-drop! With sales agents already regulated and the potential for continued exploitation of landlords and tenants by some rogue lettings agents, a simple regulation framework could have been introduced and policed by those already in a position to do so, for example, the RICS, NALS and ARLA.
Client’s money is held or handled in only a very few industries, for example in letting agencies and solicitors and is sacrosanct. In an average letting agency with say 100 properties in the Home Counties, the monthly rent roll can be over £100,000, in theory held in a client account, as well as potential deposits held of more than £100,000, albeit, held in a ‘protected’ environment. But the stories of agents disappearing with rent and deposits continue to be reported in the press.
If there were compulsory regulation of letting agents, including hoops and hurdles as well as qualifications, how many ‘Arthur Daley’s’ would be tempted to enter the market? How many tenants would complain of extortionate fees? How many landlords would suffer financially for badly managed rent arrears? How many tenants would be put at risk by late or non-existent gas safety checks?
The Housing Minister should take a second look at the whole situation and be guided by experience as opposed to policy.
For further information, please contact:
Wende Heaton, Manager
Sales and Training Department, C.A.R.L. Communications Ltd
Tel: 0845 345 5591
Email: wende.heaton@carlcomms.co.uk