The government has this week announced a series of new measures for the housing market, covering the regulation of property agents, a crackdown on rogue landlords, and a timetable for leasehold reform.
The government announced that, for the first time ever, it intends to introduce independent regulation of property agents – giving leaseholders, tenants and homebuyers a route towards better rights and protections.
Property agents will be required to obtain a license to do the job, as well as appropriate qualifications to operate, while a regulator can set codes of practice, such as standards of conduct and proper complaint handling for those they regulate.
In a speech at Labour's conference, Angela Rayner stated: "It’s not just some freeholders that can exploit leaseholders and tenants. Estate agents, letting agents and property management agent can do to. A sector with many decent businesses of course. But they are undermined and undercut by far too many cowboys, crooks and con artists. And homeowners and renters and leaseholders pay the price through hidden fees and traps.
"People who should be excited about buying a home are tricked into using overpriced in-house services. Unqualified, unlicensed and unregulated agents are taking thousands from their clients and mishandling their money. With no transparency or accountability, vultures can take advantage. We will legislate for an independent regulation to reign these cowboys in. They will be required to follow the rules and if they don’t, their licenses will be taken away."
In addition, the government has set out reforms for leaseholders and tenants, noting that "under the current system, leaseholders and those living on freehold estates can be forced to pay fees in order to receive their landlord’s permission for simple requests like keeping a pet – with no certainty of the costs and no clear oversight of the process".
The government will legislate to introduce caps on these fees that are genuinely reasonable and that landlords must follow.
The powers will also cover privately managed estates where homeowners can face similar charges for minor cosmetic changes to their properties.
As well as permission fees, the legislative changes will enable a clamp down on administrative fees, where landlords can charge for providing documents on request, or even for simply notifying them of a change in mortgage provider.
In his speech at the Labour Party Conference yesterday, Andy Burnham says he will introduce a bill before Christmas for "long overdue leasehold reform".
In addition, he said councils will be given the power to take over poor-quality or empty homes and "bring them back into public housing stock".
The Prime Minister also highlighted rental homes "in a poor state of repair", calling for an end to this, stating that landlords who rent out "the worst quality homes" will be given warnings to improve them if they refuse.
He added: “Landlords who rent out the worst quality homes will be given warnings to improve them. If they refuse, we will make it much easier for councils to acquire those homes – and we will legislate if necessary."
Industry reactions
Scott Goldstein, property disputes partner at Payne Hicks Beach, commented: "The government's reforms of the leasehold sector continue at breathtaking pace. All parties should welcome the proposals to independently regulate and license managing agents. Similar proposals have been considered before, and they are overdue.
"Tenants benefit from being able to rely on a competent managing agent, who can be a professional point of contact to deal with maintaining and administering the property. However, these new proposals will also oblige managing agents to ensure landlords understand their own enhanced regulatory obligations, and (just as importantly) should give landlords some form of redress if they fail to do so."
Nathan Emerson, CEO of Propertymark, said: “Propertymark has long campaigned for action in this area and welcomes the UK government’s commitment to stronger regulation of property agents. Professional property agents are increasingly being undercut by unqualified and inexperienced operators who are not held to the same professional standards. This is unfair to responsible businesses that invest in qualifications, training and compliance, and leaves consumers exposed to poor practice without adequate protection.
“Building on the professional standards, structures and good practice already established across the sector will be critical to making this a success and ensuring the new regime is understood, enforced and adhered to consistently."
Beth Rudolf, director of delivery at The Conveyancing Association, agreed: “The Conveyancing Association very much welcomes the government’s commitment to regulating property agents. Estate agents are a key part of the home moving process but, unlike many of the other professionals involved, they have not previously been subject to the same form of professional regulation. That becomes even more important as the government introduces its home buying and selling reforms and places greater focus on material information being provided upfront. We have been calling for regulation through our work with the All-Party Parliamentary Group for Commonhold and Leasehold Reform and Parliamentary Select Committees, and an independent regulator should also mean the cost of enforcement sits with regulated members rather than the public purse. Crucially, it should help ensure agents are properly educated, qualified and kept up to date with the considerable amount of new legislation affecting the sector."
Timothy Douglas, head of policy and campaigns at Propertymark, added: “Addressing poorly maintained properties should remain a key concern, with local authorities across England working closely with residents, landlords and property agents to understand why properties may fall below the required standard.
“Every case will have different circumstances, so any proposals must be proportionate and recognise the individual circumstances of the property and those living in it.
“Further clarity is needed on how the proposals would work in practice, including carrying out remedial work with a tenant in situ, the responsibilities of different parties, and how properties would be managed if they passed into local authority control or ownership.
“With the new ‘Register Your Rental Property Service’ being implemented for landlords from December, councils will have greater access to information to support targeted, intelligence-led enforcement. The focus should be on making better use of existing tools rather than simply adding another layer of legislation and potentially damaging relationships between good landlords and government. Any new proposals should deliver a fair, proportionate and tailored approach that achieves sustainable, long-term outcomes.”
