Licensing of the private rental sector took two major steps yesterday. The launch of ARLA’s scheme for its members coincided with revelations that mandatory licensing of both letting agents and private landlords is firmly on the political agenda.
News that the Rugg Report, which last year recommended compulsory licensing, will now provide the basis for a Government Green Paper was broken on the front page of The Times after a briefing to the newspaper’s lobby correspondent.
The Rugg Report had sunk out of sight for several months, and yesterday there were theories that the report putting it into play was timed to run as a spoiler for the ARLA launch. No official announcement has yet been made by Communities and Local Government.
However, while ARLA chief executive Peter Bolton King admitted that there had been some confusion over the two different licensing schemes, it was clear there was strong support for the ARLA scheme.
MP James Plaskitt has tabled an early day motion in support, while other MPs also appeared at the launch to express their backing. Plaskitt said most letting agents were professional but it was essential to drive out the bad ones. “I, like all MPs, have had constituency surgeries where someone has fallen foul of a letting agent,” he said.
ARLA licensing means that individual agents must be qualified and competent, having to pass exams if necessary; they must also have professional indemnity insurance, provide access to independent redress (in ARLA’s case, to the Property Ombudsman), and offer client money protection. Individual agents cannot have licensed status if they work, for example, as a branch manager, for non-ARLA firms – principal directors and partners must also be signed up.
Speaking at the launch, ARLA president David McMaster said that the issue of client money protection should not be under-estimated: “In my own business, there are just six offices, yet last year, £15m went through our client accounts. Multiply that across the industry and the sheer scale of the issue of consumer protection comes into focus.” He drew attention to letting agents who still continue to disappear with deposits and rentals.
Bolton King took up the theme, saying he had recently heard of a non-ARLA member with £70,000 of client money missing. He went on: “We have been calling for licensing for ten-plus years, and at ARLA we just decided we were going to crack on with it. We have set up the scheme to professionalise the industry, but we would still prefer the Government to make licensing mandatory for all agents.”
Housing minister Iain Wright, speaking at the ARLA launch, appeared to think that this is exactly what will now happen.
Picking up on one of Rugg’s key recommendations – that private landlords should be seen to be engaged in business – Wright said: “It is in no one’s interests that we have rogue, bad and unpopular agents and landlords. People [landlords] should view it as a business, not as a ‘get rich quick’ investment.
“I will be responding on behalf of the Government to the Rugg Review very shortly. But we want to deal with the private rental sector so that we grow it responsibly and in a sustainable fashion.”
He went on to refer to the Rugg proposal for ‘light touch’ licensing of landlords and added that the sector had recently seen the introduction of compulsory tenancy deposit protection, and also the licensing of Houses in Multiple Occupation.
Wright said: “We are now on a real journey that will see us providing fairness to landlords and tenants.”
Bolton King said at the launch that some journalists had been confused between the ARLA initiative and the revelations in The Times: “I have been taken to task by several journalists who say that our scheme is voluntary, that it is for agents only, and that furthermore, ARLA agents only account for about 50% of the industry.
“To all of that, I say you have to make a start somewhere.”
The NAEA is to launch a licensing scheme for its members later this summer.
No licensing for years – then two come along at once
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Comments
Bolton sounds like an insurance salesman,,scare the public into thinking that any criminal could set up an agency.
This is labour helping business. Give us no support then tax us through stupid qualifications. Do these people think that criminals cant read or write.If your dodgy your dodgy,,simple as. The market soon sorts out the useless agents.
I am hoping that my comment might encourage a more positive debate. Peter Bolton King seems to have worked hard to get licensing on the political agenda (I am not a member of ARLA). Okay, the ARLA scheme only builds a bit on what is already there, it doesn't apply to all agents and it doesn't apply at all to landlords, but as he said, you have to start somewhere. The Gov scheme got a lot of coverage, but it could be months or even years before anything is actually done. At least the ARLA scheme has put the word 'licensing' into the public awareness. As I say, I'm not a member of ARLA and have no drum to beat but if I was a member, I'd probably be pleased and it might just be enough to make me want to sign up as we're all looking for something that makes us different from other agents, and let's face it, there's an awful lot of rubbish service in the market.
I also saw Bolton King's manic interview where he stated "any idiot could set up as an estate agent". Well thanks a lot, it seems to me that any idiot can become chief executive of the NAEA. PBK, do you really think your members think youy organisation is doing a good job? If so, you are deluded.
I find the initials very appropriate when related to sales agents as presumably it will be ARSA. Close to what I think of all these rediculously duplicated control organisations and freaks!!!
I quit the NAEA two years a go after 8 years and feel much happier. I still don’t understand why I became a member. I personally feel that PBK should be spending his time more constructively on trying to get this industry a government bail out. We are suffering as a direct link to the failure of the banking system and are now suffering because of it. Why can't we get a government bail out?
These are all money making business's to keep people in jobs and fed... I've quit and like all the others... have spent way to much money for nothing... total rubbish and its time to stop wasting money that, in this market, does not grow on tree's and never did!!!
These schemes are a waste of time, money and effort. Just look ate what we have been paying over the years. It makes me sick. what have we got in return? Nothing!! All agents are part of this Ombudsman, it that not enough ? ----- I was working out over the last 11 years I have paid in excess of £15,000 to be part of various schemes. NOT ANY MORE -- I know I will make at least £15,000 in profit by not being part of these Jobs for the boys schemes..
simple. quit the NAEA! jobs for the boys. absolutely not necessary. for those of us running a legit business i cant see how it will affect us. by the way i was a member for nearly 15 yrs but quit 3 months ago when looking at renewal costs. hit them where it hurts.
Please can someone tell me why I need to pay the NAEA/ARLA for a licensee when the government are running a proper scheme. As the Times said yesterday the Government scheme makes the nascent scheme of NAEA/ARLA redundant surely! In fact it makes NAEA/ARLA redundant as well! I think i would rather pay the government body £50 pa than almost three times the amount to belong to the NAEA! Even moreso when you saw what a horlicks the CEO (Bolton -King) made of the TV interview on the BBC yesterday!
The Vision is absolutely correct. Unfortunately, in Scotland, their vision was similar and also included landlord registration. After 3 years there are still many rogue landlords and I would imagine a number of agents who do not know what a proper non-interset bearing, no fee entry rental or deposit client bank account is.
The Vision has to be policed - and the body responsible given a voice and accountability to bring abusers to court - and to ensure it sticks.
So far, that has not happened in Scotland. The rest of the UK is no different, unless the policing changes for the better.