Metro - 07 March 2013
By Jo Eccles
There has been a significant shift in the UK towards renting versus buying, with 3.6m people renting in 2011, compared to just 1.9m in 2001. Whilst you would expect more complaints to bodies such as The Property Ombudsmen (TPO) considering the rise of renters, complaints have shot up disproportionately, with 3,739 complaints logged in 2002 compared to a whopping 8,334 in 2012.
With renting now a long term option for many (whether out of choice or not), the calls for greater regulation in the private rental sector are intensifying. Unlike estate agents dealing with the sale of properties, UK letting agents aren’t subject to any regulation, despite the large sums of money they handle such as tenants’ deposits.
Despite there being an estimated 15,000 letting agents operating in the UK, approximately 40% are not signed up to a redress scheme, so essentially anyone can set up as a letting agent. This means that landlords and tenants who are left out of pocket have no organisation to investigate their claim.
There has been a lot of lobbying to the government to change the lack of regulation, and some headway has been made. Next month, the House of Lords is due to vote on an amendment to the Enterprise and Regulatory Reform Bill (ERR), which would require letting agents to be registered with a redress scheme. However, even if the vote is in favour, the vote could go back to the House of Commons and the amendment could be removed on the basis of arguing against excessive red tape.
I am personally all for greater regulation. Whilst signing up to a redress scheme does cost money, there is margin in the fees charged by letting agents to do so. Also, buyers and sellers are represented by a solicitor during the purchase/sale process, whereas landlords and tenants don’t tend to be and they often have limited or no knowledge of tenancy law and their rights, so it’s even more important for greater regulation to protect them.