Shapps ditches 'red tape' regulation of letting agents

Housing minister Grant Shapps will not license either letting agents or private landlords, promising them ‘no more red tape’.

Speaking in Parliament, Shapps said the private rented sector was already governed by a well-established legal framework and that the Government has no plans to introduce any further regulations.

The announcement delighted landlord organisations, but both NALS – which had hoped to run the licensing scheme for agents – and ARLA were quick to condemn it. Last year, both launched licensing schemes for their own members.

Ombudsman Christopher Hamer described the decision not to license agents as disappointing, whilst some letting agents expressed bafflement.

Lucy Morton, last year's ARLA president and partner of London agent W.A. Ellis, said: "This is a major error of judgement."

Ian Potter, operations manager of ARLA, said: “We are extremely disappointed with the housing minister’s decision to scrap the previous Government’s plans for the regulation of letting agents. A minimum requirement must be surely be consumer redress and protection of all funds taken from the public, not just tenants’ deposits.
 
“Currently, any person or organisation can become a letting agent. Until that is changed via national regulation, unprofessional, unqualified and unethical operators will continue to exist, to the detriment and expense of consumers and the market as a whole.

“We note, however, that the minister has not closed the door and look forward to the opportunity to have meaningful dialogue with him in the future.”

Caroline Pickering, chairman of NALS, said: “We have seen a significant increase in agents misappropriating the monies of tenants and landlords. For those consumers with a licensed NALS firm, they can claim back monies from the Client Money Protection scheme, but not everyone is that lucky. 
 
“We have been working with the police on many cases to charge those unscrupulous agents using consumer monies as an overdraft, and worse yet, absconding completely, and charges have now been made in some cases, and more expected. But the Government needs to take action to end this illegal behaviour.
 
“People will continue to be at risk just when they need to know where they can safely go when they need to rent a home. If the Government does not plan to protect the consumer by introducing much-needed regulation, we appeal to them to talk to us and the industry urgently.”

Also ditched by Shapps yesterday are plans for a national register of all private landlords, plus proposals for a ‘trip adviser’ style website where tenants could say what they liked about landlords, and for a national housing hotline.

In his statement, Shapps said there were three million private tenants, the “vast majority” of whom were happy with the service provided by an estimated one million landlords.

Instead, he urged councils to use the powers they already have to tackle the minority of rogue landlords – for example, by forcing them to put right hazards in their properties or by using discretionary licensing powers.

David Salusbury, chairman of the National Landlords Association, said: “We are very pleased that the Government is rejecting previous attempts to introduce a register: it was the wrong way to go about raising standards in the private rented sector and would not have rooted out rogue landlords. In fact, we believe the likely consequence could have been to penalise the law-abiding, while at the same time driving the worst landlords under the radar.”
 
Ian Fletcher, director of policy at the British Property Federation, said: “Landlords had lost all confidence in the ever more complex ‘simple’ registration proposals, and will be glad to see the back of them.”

But he warned: “The easy part of being in power is getting rid of the last lot’s policies. The harder task is developing your own.”

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