Earlier this month, it was revealed that property industry bodies have joined a new Code of Practice Steering Group to enact one of the Regulation of Property Agents (RoPA) report's key proposals.
Lord Best's report, published last summer, called for the industry to adopt a new industry code, as well as recommending mandatory qualifications and licensing for agents and the formation of a new regulator. The new group marks the first step in implementing the report’s recommendations.
Understandably, the COVID-19 pandemic may have caused some delays and could continue to do so over the coming months. However, it's positive to see that work around the regulation – originally set to be introduced within two years of the 2019 report – has begun.
What is the Steering Group?
The Steering Group has been formed by the Royal Institution of Chartered Surveyors (RICS) and The Property Ombudsman (TPO). Its task is to create an overarching Code of Practice for residential estate and letting agents, with the ultimate aim of improving standards to protect consumers.
A wide range of industry organisations have joined, including ARLA and NAEA Propertymark, Safeagent, the Tenancy Deposit Scheme, the Association of Residential Managing Agents and the Property Redress Scheme. It also includes representatives from the Ministry of Housing, Communities and Local Government, as well as a leading Trading Standards officer.
Chairing the Steering Group is Labour peer Baroness Diane Hayter – an appointment with plenty of previous experience. She served as Chair of the Legal Services Consumer Panel, Vice Chair of the Financial Services Consumer Panel, a member of the National Consumer Council and chair of the Property Standards Board.
The Steering Group is being described as independent and all those taking part are doing so on a voluntary basis, indicating that the group is committed to creating a better regulatory system for both agents and consumers.
What's more, the group includes many industry figureheads and organisations with experience of the agency sector. Hopefully, this means that the Code of Practice will take into account the needs, challenges, requirements and responsibilities of agents on the ground.
What will the Code of Practice include?
According to the launch statement released on July 1, the Code of Practice will cover all aspects of residential property. It will contain a set of high-level principles followed by detailed chapters covering the various types of agency, including sales, lettings and management.
It has subsequently been revealed that the code will include two sections: 'Dealing with Consumers' and 'Managing Businesses and Staff'.
It will address issues such as fair treatment of consumers, respect for diversity, training and development, conflicts of interest, complaints, handling of client money and data protection.
Currently, TPO and RICS publish their respective Sales and Lettings Codes and The Blue Book. The new Code of Practice will draw upon both of these widely-used guides with input from the supporting partners.
It will also incorporate other existing 'best in class' materials such as the Residential Service Charge Code, which is already endorsed by the Secretary of State.
When the Code of Practice comes into force, it is expected that agents will be held accountable through a mandatory licensing regime overseen by the new regulator.
Why is this a positive step forward?
We previously suggested that agents shouldn't be lulled into complacency by the delay to RoPA progress and that, although nothing had changed since the report was published last summer, property professionals should not be expecting industry-wide regulation to 'go away'.
It's therefore positive that the Code of Practice is now being developed and this news will likely have been welcomed by most in the industry. Often the small minority of agents providing a poor service are able to do so because consumers are not aware of the standards required and don't have a single official source to consult. With a single Code in place, consumers will have more power to hold agents to account.
The setting up of a Steering Group brings regulation back to the top of the agenda and serves as a reminder to all of us in the industry that we must continue to champion transparency and education.
During recent months, the impact of the COVID-19 pandemic has shown that consumer trust and high standards of service from agents are more important than ever.
As the property sector was among the first to re-open, agents have been given great responsibility when it comes to staying on top of the latest developments and government rules, while providing consumers with financial and safety advice.
The Code of Practice is now open for consultation, with feedback sought from professionals, buyers, sellers, lenders, tenants and landlords. Following the consultation period, which closes on September 4, the plan is then for the Code to be 'handed over' to the new regulator once it has been established.
As the need for property industry regulation remains significant, it is hoped that the formation of the Steering Group and subsequent creation of the Code of Practice can act as a catalyst for the rest of the RoPA recommendations – such as licensing and mandatory qualifications for agents – to progress over the medium term.
*Neil Cobbold is Chief Sales Officer at PayProp