Stricter Letting Agent Regulations Could Be the Way Forward

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.

regulations1Somewhat 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.”

Things Looking Up For Housing and Job Markets

Two forward-looking studies that were conducted by OnLet (An Online Letting Agents) have suggested that both the housing market and employment rates are actually beginning to steady themselves. These are very positive signs for the country’s economy, although it is reported that it might get worse before it gets better.

November in particular showed property prices stabilising, with barely any movement, whilst the total number of properties sold rose slightly. Only a very small percentage of letting agents actually realised a drop in the prices of properties they were advertising.

online letting agents on the riseFebruary’s numbers were very similar, showing signs that the market is beginning to settle. As is typical in the UK, the only location where property saw an increase in value was in the capital. Almost half of all letting agents said that the value of homes had increased during these months.

That doesn’t mean to stay things aren’t improving elsewhere though, with market stabilisation being realised across the whole country. It appears that rather than being resigned to the rental market, people now have the money to buy again. It’s unlikely that the market will see a dramatic increase in the average property value, with things on that front likely to remain the same for a period of time, but the number of properties that are sold each month is predicted to steadily rise.

A senior official from the Royal Institution of Chartered Surveyors agreed with these predictions, stating “Whilst the housing market has been in the doldrums for some time, the general feeling is now one of optimism. It is definitely a good sign to see statistics that show the number of sales rising in areas across the country that were hit particularly hard by the recession.”

In addition to this, the official also spoke about the government’s notice that they will provide the financial resources needed to secure building land for new, large-scale housing projects. “It is a long term project that needs to be given time to have any real effect on the market. The effect of a near 5 year recession cannot be fixed quickly.”

In addition to positive news about the housing market, there’s is also a great deal of optimism surrounding employment rates, with recruitment company Manpower saying that employment rates are rising. In fact the rates for 2013 are better than any in the last 5 years. In a survey conducted recently, 6% of employers said they were actively searching for new staff this year.

A senior partner from the firm added “Things have certainly changed in the last year. 12 months ago the jobs market was looking particularly grim, but the year actually ended well, with a significant number of companies looking to take on new staff for the first time in years. The market appears to have weathered the storm brought about by the recession and now it’s rebuilding itself.”