Government proposes independent regulator of property agents
The government has proposed for an independent regulator to be set up to regulate estate agents across the UK and letting and managing agents in England only.
The Ministry for Housing, Communities and Local Government (MHCLG) released the final report the final report from the Regulation of Property Agents (ROPA) working group.
The report recommended that the regulator should oversee compliance with an overarching code of practice and mandatory qualifications.
The report read: “We agree that a new approach is needed: regulation will provide the opportunity to prevent bad practice and drive cultural change within the industry.
“We recommend that the new regulator take over responsibility for the approval of property agent redress and client money protection schemes.
“The new regulator should have the power to appoint a single ombudsman for property agents, rather than competing redress schemes, if they believe this to be the best way of improving standard.
“We recommend that the new regulator should have a range of options for enforcement action according to the seriousness of the infringement and how regularly it has occurred.
“These options should range from agreeing remedial actions and issuing warnings up to the revocation of licences and prosecutions for unlicensed practice.
“The new regulator should publicise infringements and the enforcement action taken. For those wishing to dispute the new regulator’s decisions or sanctions, there should be a right of appeal through the First-tier Tribunal.
“Furthermore, the First-tier Tribunal should also be granted in law the power to consider applications for judicial review against the new regulator. “
Mark Hayward, chief executive, NAEA Propertymark and David Cox, chief executive, ARLA Propertymark, said: “This is a significant moment for those in the property industry and a huge leap forward in stamping out bad practice.”
In October housing minister, Heather Wheeler MP set up the working group and hired Lord Richard Best as chair.
Other recommendations from the report included that all agencies operating a residential property business should be licensed and licensing should include a fit and proper person test.
It recommended all customer facing staff employed within residential agency business should be licensed and adhere to a code of practice.
The report also recommended all customer facing staff employed within residential agency business should hold a qualification at Level 3, preferably with directors qualified to Level 4.
Hayward and Cox added: “We have long called for government intervention to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (A-level).
“Following the extensive considerations by the working group, it is now for government to create the structures for a properly regulated industry, whose professional knowledge and skills are trusted and respected by all.
“These are substantial changes which will require agents to start making preparations now to ensure that they are well placed for when these proposed qualification requirements are introduced.
“While we anticipate that the need for property qualifications will be phased in, we advise agents to get ahead of the competition and to stand out by adopting the new requirements early.
“Propertymark can support you and your organisation both with getting qualified and preparing for regulation.”
Marc von Grundherr, director of Benham and Reeves, said: “Any form of regulation is a step in the right direction and a step that the industry has been needing for a long, long time.
“Really, we would like to see this regulation stretch to all of those operating in the sector, whether they be a letting or estate agent, a property listing portal or a short-term letting site.
“To date, a lack of licensing, a code of practice to adhere to, and the requirement of qualifications to actually operate as a property professional have resulted in a number of below-par agents dragging the good name of the industry down with them.
“This clear show of intent from the government should help sort the wheat from the chaff, raising the operating standards of the industry and the service provided to tenants and home buyers and sellers across the nation.
“Hopefully, it equates to more than just hot air and the assurances and enforcement measures mentioned in today’s statement will be upheld to the letter.”