Estate agency chain Leaders has called on the new government to bring in formal regulation of letting agents.
Chief executive Paul Weller said: “More people than ever before now use the services of letting agents.
“Yet the vast majority are unaware that letting agents are not regulated by the Government and that anyone can set up a letting agency, with no experience, knowledge of lettings law or Client Money Protection in place.
“Letting agents can hold hundreds of thousands of pounds in rent which they are supposed to protect.
“But without regulation there is no way to enforce this and there have been countless cases of letting firms losing their clients’ money, using it for their own ends, or completely disappearing with it, leaving landlords and tenants badly out of pocket.
“Too many people have suffered at the hands of agents like this, as well as incompetent and unscrupulous agents who fail to provide a decent standard of service.
“This needs to be tackled urgently and the only way to do so is to make it mandatory for agents to abide by an agreed code of conduct, be professionally qualified with a sound knowledge of the laws governing lettings and to have Client Money Protection and professional indemnity insurance in place.”
He said that only agents that are members of a self-regulating professional bodies, such as ARLA and RICS, sign up to a code of conduct.
Weller said: “The rest can get away with cutting corners, and as a result can often afford to undercut good-quality agents on fees to attract unwitting tenants and landlords.
“The new Conservative government has put forward some promising policies on housing which we believe will be good for the market.
“These include the promise to build 200,000 new homes which will be available at a 20% discount to first-time buyers under the age of 40, and the launch of a new Help to Buy ISA for first-time buyers which will enable them to save up a subsidised deposit to buy their own home.
“There is now a golden opportunity to make a positive difference to those renting and letting.
“Proper regulation is essential to stop rogue agents taking advantage of the thriving rental market.
“Good agents have been crying out for this for years and, as the numbers of those renting and letting continue to rise, the need for it grows ever stronger.”
The Conservatives have consistently said they do not want to regulate the letting industry further, having introduced compulsory membership of a redress scheme last October.
However, critics say this is too late and after the horse has bolted, and that it does not provide protection to consumers at the point of need.
Written by: ROSALIND RENSHAW | MAY 14, 2015