ResidentialOct 18 2017

Crackdown on £1.4bn rip-off by rogue property agents

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Crackdown on £1.4bn rip-off by rogue property agents

The government has unveiled plans for a crackdown on rogue agents charging rip-off fees in the property management sector.

Communities secretary Sajid Javid today (18 October) announced proposals to ensure all letting and management agents across both the private rented and leasehold sectors are qualified and regulated before they can practice.

The government has launched a call for evidence to determine whether an independent regulatory body should be established, and if separate bodies should be established for both leasehold and private rented management, and letting agents.

While the sector is partly self-regulated by the Association of Residential Managing Agents (ARMA) and ARLA Propertymark, other property agents currently operate outside of any system and can provide a poor deal for consumers.

The All Party Parliamentary Group on leaseholds believes up to £1.4bn-worth of unnecessary service charges are being paid each year due to unfair practices.

Mr Javid said: “Our proposed changes to regulate the industry will give landlords, renters and leaseholders the confidence they need to know that their agents must comply with the rules.”

The government will consider measures to ensure tenants have a greater say over the appointment of managing agents and to boost transparency around charging, so leaseholders know what they are being charged for and why.

It comes as part of wider action to give more power to the tenant and leaseholder, and to prevent abuses of the system.

Earlier this year, the government announced proposals to ban new build homes being sold as leasehold and restrict ground rents to as low as zero.

It is also pressing ahead with a ban on letting fees so that tenants are not hit by unfair charges.

Martyn Alderton, national lettings director for Your Move and Reeds Rains, commented: “We fully support stronger lettings legislation to clamp down on the small minority of rogue agents and ensure that any fees charged within the industry are fair and transparent. 

“Ultimately tenants should feel confident that the homes they pay for are safe and meet clear minimum standards and that the agents they deal with are fully qualified and regulated to practise.”

simon.allin@ft.com