This week I carry out a question and answer session with one of the most high-profile names in property.
Isobel Thomson has been Chief Executive of the National Approved Letting Scheme (NALS) for 17 years.
NALS, an independent, not-for-profit, licensing scheme for lettings and management agents, was first established in 1999 by the Empty Homes Agency with the backing of industry beasts such as RICS and ARLA, plus some government funding.
Counting itself as the only agent organisation whose sole focus is ‘consumer protection’, NALS aims to offer peace of mind to landlords and tenants when dealing with agents who bear the NALS logo in knowing that they meet industry standards and can offer financial protection for clients’ money.
Anyway, without further ado, it’s time for those questions…
How can agents prepare for the proposed ban on letting agent fees?
MHCLG have confirmed that the ban won’t be implemented until at least spring 2019, which is later than originally stated, and allows agents time to prepare for changes to their business model, but we do not underestimate the difficult decisions this will require firms to make.
We’re supporting our firms by continuing to inform government of the implications of the ban and ensure it is fair for all. NALS believes that there is more scope for charges to be exempt from the ban. We’ve done a great deal of work with the Fair Fees Forum which we set up to bring industry and consumer groups together with government to examine and consider the impact of the ban.
How big a role do you see technology playing in the private rented sector in the coming years?
Technology will be increasingly important for agents in streamlining their businesses, whether that’s through new referencing methods, online services for tenants or new accounting support packages. With financial pressures resulting from the fees ban, technology is evolving quickly to offer agents cost-effective alternatives to traditional paid-for services.
What are your views on mandatory CMP?
Through our support of the SAFEagent campaign, we believe we were instrumental in achieving mandatory CMP for all agents. SAFEagent - launched by agents for agents - is something the industry should be proud of and is a great example of what can be achieved by working together for the good of the consumer.
The government has consulted on implementation of mandatory CMP, but we are not there yet, and we will continue to champion the cause of those agents who have already on a voluntary basis become part of a CMP scheme.
Unfortunately, we still hear of too many cases of criminal agents. Given that the sector is estimated to hold around £3 billion of tenant and landlords’ money at any time, protecting the consumer is vital.
What more can be done to cut down on rogue agents and landlords operating, especially in London?
Enforcement is key to dealing with rogue agents and landlords. We do a great deal of work with Trading Standards teams in London and in the rest of the UK to help crack down on rogue agents but ultimately, that does come down to funding and we believe that government has not yet addressed this issue adequately enough.
We created the NALS’ Enforcement Toolkit, which was specifically designed for cash-strapped councils to offer a step-by-step guide to the legalities and requirements of prosecuting agents who did not comply with the Consumer Rights Act specifically to display fees, which redress scheme they were part of and if they were part of a CMP scheme.
We know this is well used by trading standards teams across London and we are looking to do more to support the work they do on the ground.
Are the government calling for too many consultations, or is this necessary to keep things open and democratic?
Consultations follow policy announcements and where the policy is sound there is no issue in having a consultation. It’s crucial that industry stakeholders have a say in the changes proposed for the PRS.
However, what we have had recently is a rush of consultations with no indication of the structure for implementation or the strategic vision. This could be the result of having so many short-stay housing ministers, but we continue to engage with government to ask them to adopt this approach.
How have things changed in the PRS since NALS was established in 1999?
The rate of growth in the PRS has rocketed since we were established, with demand only set to increase as 25% of households rent privately by 2021. There is now much more focus on renting as a tenure and a recognition by government of the importance of the sector in providing much-needed housing.
Since NALS was created, we’ve seen governments of both colours make many adjustments to legislation governing the lettings sector, but never willing to regulate, until now. The majority of professional agents want regulation, coupled with effective enforcement of the sector. We hope that can finally be achieved to improve things for the consumer and stamp out the rogues.
What is currently the biggest challenge for letting agents?
The fee ban is a huge issue – the behaviour of the minority in charging inflated fees has affected the majority who charge reasonable fees for their services. The revenue lost could result in job losses or even smaller agents shutting down altogether.
What we continue to press to government is the consumer detriment which could occur among certain tenant groups; low income families, tenants on benefits and tenants with complex right to rent issues. When it comes to referencing for these tenants and the cost falls to landlords, will they be willing to pay if other ‘safe choice’ tenants are available who take up less of an agent’s time?
What digital or PropTech products have caught your eye?
NALS is interested in products which can assist tenants in securing a credit history for the rental payments they make which then allows them to access cheaper goods and services or ultimately a mortgage if they move into home ownership.
For agents we welcome products which make client accounting streamlined and more secure, lessening the risk of anything untoward happening to tenants’ and landlords’ money.
What do you make of the decision by Ombudsman Services to withdraw from offering redress to the property sector?
We understand the decision to withdraw from the current redress set up and look to the future. This is in light of the government’s announcement to consult on a single housing ombudsman - providing ease of access for property related consumer complaints.
Ombudsman Services has performed well for NALS firms, and we look forward to engaging in discussions with them as they evolve their offering to suit a new consumer protection regime.
Thanks for the answers, Isobel. Very insightful.
If you have any comments to make, you know where to put them.
Until next time…
*Nat Daniels is the Chief Executive Officer of Angels Media, publishers of Estate Agent Today and Letting Agent Today. Follow him on Twitter @NatDaniels.