18 Oct 2017
People could be over-paying for agents’ services by up to £1.4bn.
The accusation is in a new paper, a call for evidence into the letting and managing agency market that has been issued by the Department for Communities and Local Government.
Launched today, it will run for six weeks until November 29 and is titled “Protecting consumers in the letting and managing agent market”.
It covers only England, because of devolved housing powers in the rest of the UK.
Focusing on the growing numbers of people who rent their homes or own leasehold properties, the paper says that this has “fuelled the growth of a multi-billion pound property agent market”, estimated to be worth £2.5bn to £3.5bn a year.
The paper goes on to say that “in return for these significant sums, agents play an important role” in ensuring that “residents are safe and secure in their homes”.
However, it claims, “a lack of transparency can allow unfair fees and costs to go unnoticed”.
The paper – which appears confusing in sections where it seems to jump from the private rented sector into leaseholds – says there is “overwhelming evidence” that consumers could be over-paying for management services, and that where property agents under-manage, tenants suffer due to poor quality repairs and services.
The paper also says that a lack of minimum standards has allowed unscrupulous agents to enter the market, with anyone able to become a property agent, regardless of background, skills and experience.
The paper reinforces the Government’s existing commitment to regulate letting agents, but also discusses regulation of property managers in the leasehold sector.
It seeks views on minimum entry requirements, and the standards that leasehold managing agents should follow.
It also expands on the proposed regulation of letting agents, as well as that of block managers.
It says that all letting and managing agents could be required to join a relevant professional body approved by the Government; these bodies could in turn by supervised by an umbrella regulatory body.
Alternatively, a new Government approved regulatory body could be established to which all letting and managing agents would have to belong. Membership of a professional body would be optional.
The paper also suggests that regulators would act as “consumer champions”, and play a role in supporting people to switch agents.
The paper is at www.gov.uk/dclg
The survey can be answered online at: https://www.surveymonkey.co.uk/r/property_agents
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