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New industry regulations: clarity and speed are vital

A leading figure in the PropTech sector says clarity and speed are vital to ensure agencies can adequately prepare for a new regulatory regime - and to ensure that the bad agents are weeded out.

Neil Cobbold, chief operating officer of automated payment system PayProp, says the new processes and structures recommended by the Regulation of Property Agents working group last week are likely to be welcomed by the industry.

But he insists that the new system - which advocates substantial centralisation and upgrading of existing regulation, redress and Trading Standards industry overview - will need to be clear “so agents and agencies know their responsibilities and consumers can understand their rights and routes to redress.”

Cobbold welcomes mandatory qualifications and licences as means of identifying agencies “which aren't professionally committed to the industry and prohibit them from operating” but he demands that criteria are spelt out as soon as possible “so that agencies can plan for the training time and costs to reduce the impact on their business.”

He also says that the additional cost of funding the new regulator through an industry levy remains unspecified and because it does not initially apply to the short lets sector it could indirectly lead to more landlords moving towards that unregulated area - or to self-management of lettings properties, which will not initially be covered by the new regulator.

“As we move forward with these proposals, agents' key considerations will revolve around associated costs, time taken for implementation and how existing workforces and new recruits will be affected in the future” Cobbold says.

“The next crucial step for agents will be to start preparing for change immediately, as the report indicates that the regulator could be in place in two years. The government will need to implement the new system clearly and efficiently, with capacity for effective enforcement” he concludes.

The Regulation of Property Agents working party last week recommended:

- a new independent regulator to lead a new public body to oversee a new regulatory regime for property agents; 

- the new regulatory regime will be binding on companies, and certain individuals, that act as intermediaries to property transactions; 

- those who are regulated will have to be licensed by the new regulator;

- the regulator will also be responsible for an overarching statutory code of practice, with different parts binding on agents depending on their area of work;

- a new ‘modular’ approach to qualifications, required for individuals within regulated companies “allowing agents to become proficient in those aspects of property agent work as suits the needs of their role and career, subject to minimum requirements”; and

- the new regulator is central to “a system of enforcement and redress which takes on, at their discretion, the support of national and local trading standards, of redress schemes, and of professional bodies.”

You can see a full summary of its proposals here.

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