Posts with tag: private rental sector regulations

The Changing Role of the Letting Agent

The last few years have seen a boom in the private rental sector, with generation rent forced to rent instead of buy. MPs and pressure groups have focused on Britain’s tenants, landlords and letting agents.

The growth of the sector has been so large that in 2014, the Intermediary Mortgage Lenders Association (IMLA) claimed that if current market trends continue, over half of UK homes would be rented by 2032.

Due to more and more money going into the sector, regulations have become stronger. These changes have not only affected the role of the letting agent, but have driven out rogue operators in the country.

Since 2010, there have been several important changes for those working within the private rental sector. Specialist rental software provider, OnBoard Pro, has discovered what these means for letting agents.

Its research details the changing role of the agent, through the pieces of legislation the sector has been hit with in the last ten years. OnBoard Pro also looks at what is happening now and what is coming in the future.

The last decade

  • April 2006 – Scottish landlords must join a national register before renting out a property.
  • April 2012 – All rental properties must have an Energy Performance Certificate (EPC).
  • November 2012 – Letting agent fees charged to tenants are banned in Scotland.
  • November 2013 – The Advertising Standards Authority (ASA) rules that agents must include information about non-optional fees in advertisements.
  • February 2014 – Landlords and agents must conduct Legionnaires’ disease risk assessments due to updated guidance by the Health and Safety Executive (HSE).
  • October 2014 – Letting agents must be a member of one of three Government-approved redress schemes.

At present

  • May 2015 – All letting agents must display their full fee tariff, publish details of the redress scheme that they belong to and state whether they offer client money protection.
  • The Changing Role of the Letting Agent

    The Changing Role of the Letting Agent

    June 2015 – Under the Deregulation Act, the small amount of deposits taken before 6th April 2007 must be protected in one of three schemes.

  • Ongoing – HM Revenue & Customs (HMRC) require agents to provide a list of landlords that they have collected rent on behalf of.
  • Ongoing – The introduction of selective landlord licensing schemes in parts of the UK, including Liverpool and areas in London.

The future 

  • October 2015 – All rental properties must have a carbon monoxide alarm that is checked regularly.
  • October 2015 – Smoke alarms must be fitted on every floor of all rental properties.
  • October 2015 – Under the Deregulation Act, landlords will be unable to serve a section 21 notice if they or their agent do not handle repair requests correctly.
  • 2016 – Landlords and agents must carry out energy efficiency improvement works on rental properties, if the tenant requests.
  • 2018 – It will be illegal to rent out a property that has an energy efficiency rating of F or G.
  • Unknown – Right to rent immigration checks will be rolled out nationally.
  • Unknown – Planned localised rent controls and landlord repossession changes in Scotland.

Members of the industry give their opinions on this:

CEO of OnBoard Pro, Stephen Purvis, says: “As we have found from talking to agents around the country, as well as in Scotland, the role of a full service letting agent becomes more complicated and regulated as each year passes.

“That is not to say that increased regulation is necessarily a bad thing. The more rogue landlords and agents that are prohibited from operating in the sector, the fewer negative portrayals of agents we will see in the mainstream media.

“The majority of agents are very quick to get up to speed with the latest changes affecting them. However, after breaking it down like we have here, it shows the quite astonishing amount of new tasks and checks letting agents are taking on all the time.”

Purvis continues: “In just five years, agents have gone from having to join a redress scheme and organise Legionella assessments to having to also disclose their full fees tariff and make sure all of their landlords’ old deposits are protected.

“And in the next five years we can expect the list to lengthen yet further as agents and landlords will be expected to check tenants’ immigration status, make sure rented properties are energy efficient, and install fire and carbon monoxide alarms in all properties.

“With all of this in mind, keeping up with industry news outlets as well as thoroughly digesting any Government or industry body information issued has become more important than ever.

“On top of this, as legislation and administration duties increase, utilising the latest technology allows agents and landlords to efficiently streamline processes and subsequently spend more time looking after tenants and brushing up on the latest legislation and industry practice.”1

Director of London’s Kings Group, Karl Knipe, comments: “I don’t feel the front end of the job has really changed. It’s no different today than it was five, 10 or 20 years ago. However, it’s the backend, the legalities, which have and are changing all the time. This makes doing the job – if being compliant and safe – more costly for the agent, landlord and ultimately, the tenant.”1 

Founder of Letting Solutions in West Lothian, Brian Callaghan, speaks about the Scottish private rental sector: “Scotland has much to be proud of in the private rented sector. A sharp focus on tenant safety and rights has led to enlightened legislation and rules over many years.

“However, it is sad to see the industry in danger of losing its way. The Scottish Government’s adoption of some of the destructive elements in Shelter’s agenda is in danger of leading Scotland into a cul-de-sac.

“Stimulating the supply side should be the absolute priority. Instead, the Scottish Government is moving in the other direction. Misconceived tenancy reform, including localised rent control, seems to be on the way. If this comes, a reduction in supply is certain.”1

Lettings Director of Brighton and Hove’s Mishon Mackay, Talitha Setz, says: “The last five years have seen significant changes, and more importantly, an improvement to the UK lettings industry. Under the guidance of a professional letting agent, when basic steps are followed, the relationship between landlord, tenant and agent is a harmonious one.

“A competent, experienced letting agent with local knowledge and national accreditation will guide landlords through this entire process. Many dual selling and letting agents will manage the process from purchase to tenant, find to full management, whilst limiting the mounting costs where possible and provide a safe and well maintained property for many years to come.”1

Lettings Manager at Capital & Coastal in Bournemouth, Simon Kerley, notes: “Most of the changes brought into the rental market are positive and designed to protect consumers and encourage those providing a service – landlords and agents – to raise their standards.

“Often, the effectiveness of some of these changes can be hard to measure, especially with the market changing so rapidly, making it difficult for regulation to keep pace and remain relevant. Competition for letting agents remains high, especially since there is no legal requirement to have a formal qualification to be an estate agent. Therefore, anything that helps the good stand out from the bad, in our opinion, can only be positive.”1 

Director of East London’s Amilli Property, Kenny Sahota, concludes: “As the demand for renting grows, so has the number of letting agents. Over the past five years, we have seen rogue traders leading landlords and tenants out of pocket. The rules and regulations have been getting tighter to prevent these issues from happening, which is great for landlords.”1