Letting agent regulations: The lowdown
Regulation within the lettings industry has been something of a controversial subject in recent years. There is currently no compulsory regulation of the lettings market. Many agents choose to remain unregulated so they can behave how they like, regardless of business ethics or trading standards.
However, anyone who is serious about starting a reputable letting agency can opt to be regulated by the Association of Residential Letting Agents (ARLA). There are other regulatory bodies, but ARLA is the only one concerned solely with the British lettings industry. It currently boasts almost 6,000 members.
In order to become ARLA-registered, letting agents have to prove that they are run by qualified, reputable professionals. All ARLA members have to agree to abide by the body's code of conduct, which states what is regarded as acceptable practice in their industry.
ARLA members also agree to undertake at least 12 hours of continued professional training a year, so that customers can be sure their agent is up-to-date with the latest landlord services, trends and regulations in the lettings industry.
If an official complaint is made against an ARLA-registered agent, the body will use their code of conduct to evaluate whether or not a letting agent has acted irresponsibly. ARLA can issue a number of sanctions if it believes this is the case, including financial penalties, a membership suspension or even complete expulsion from their list of agents.
Why is regulation important?
Becoming an ARLA member lets customers know that they are dealing with a letting agent which plays by the rules. It can relieve any fears that tenants may hold about unnecessary fees, breaches of contract or unreasonable customer service. In a nutshell, it can boost an agent's reputation and attract more customers.
ARLA offers more than regulation to its members though. The body also offers its members plenty of discounts on training courses, insurance, car hire and advertising. It gives advice in the form of its weekly newsletter, regional meetings and online discussion board. They will also be given free access to an ARLA mortgage facility and paid a fee every time it is used to secure a mortgage.
Calls for further regulation
Despite the punishments that ARLA can issue to ill-disciplined agents, there have still been calls for Britain to up its regulation of the lettings industry.
In 2012, the Labour party launched a policy review of the lettings sector and suggested there was "no place" in the country for dishonest agents who feel they can charge whatever and behave however they like. It was suggested that, now the lettings industry has overtaken social housing as the second-largest tenure in the housing market, it is time to take a stricter approach to regulation of the lettings market.
ARLA and other professional bodies including the Royal Institution of Chartered Surveyors (RICS), have backed these calls.
Yet, in 2010, the then-housing minister Grant Shapps dismissed these calls - insisting they would cause too much "red tape". Whether or not current housing minister Mark Prisk feels the same remains to be seen.
For the time being at least, the government could be well advised to increase awareness of the regulation that does exist in the UK. If Brits are more aware about the existence of ARLA, they could be more inclined to choose an agent which is regulated by the body.