As the country’s decision makers look for ways to generate more revenue for our economy, studies undertaken have highlighted one possible way of doing so; enforcing stricter regulations on UK letting agents. If implemented, it is predicted that new regulations could generate as much as £20 million in financial benefits per year.
Somewhat surprisingly, virtually anyone at present is able to set up a letting agency. There are no formal qualifications that need to be completed, no prior experience required and there is no real code of conduct for these businesses. What does this mean? It increases the likelihood of letting agents abusing their positions and exploiting each party involved in the rental process.
The studies that were conducted explored the potential benefits and results of imposing stricter regulations, by taking into account the number of active letting agents currently operating in the country – 11,560.
Whilst all the talk has been related to the financial benefits that could be achieved, it must be stressed that significant investment would have to be made initially. It has been estimated that the cost of actually putting all systems and structures into place would cost in the region of £45 million.
Both landlords and tenants would be better protected and agents would no longer be able to hit clients with suspicious charges or withhold deposits without good reason. It is thought that the new regulations would also increase efficiency and reduce the required input of landlords, saving them both time and money. Letting agents would have to undergo proper training which would better position them to advise clients and lessen the risk of disputes escalating to court.
A senior official at the Royal Institute of Chartered Surveyors recently said “The findings from these studies really highlight several reasons why the government needs to take action. Tenants and landlords across the country are currently at the mercy of letting agents, which not only impacts those parties financially, but also the nation’s economy in general.”