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14 / 05 / 2014

If in doubt blame a letting agent

If in doubt blame a letting agent

By Stephen Nation, Lettings Managing Director, Connells Group

The Labour party’s latest attempt at generating popular support by knocking letting agents is at best ill considered and at worst capable of damaging the growth of the private rented sector at a time when new landlords need to to invest more than ever.

The true revolution in the property market in recent years has not been sky high prices in the South East but the growth of the private rented sector which now accounts for approximately 16.5% of all households, or nearly 3.8 million homes in England. The vast majority of these properties are not let through agents. Proposals to ban letting agents charging fees to tenants, apart from forcing rent up will no doubt force more tenancies ‘under the radar’ where no amount of regulation will have any effect.

Good agents have already welcomed fee transparency which gives the consumer choice and from October this year all letting and property management agents will be required to become members of an approved redress scheme. There should, of course, be no hiding place for a rogue agent or for anyone who doesn’t appreciate that our industry is already changing for the better.

So what should Government do to resolve housing issues other than attack those already committed to putting things right? Start policing existing legislation for one thing. If you rent a property through an agent you’re more than likely to have your deposit protected, have a tenancy agreement that protects your rights as well as your landlord and have someone to guide you through what can be a complex and stressful experience. However, poor quality accommodation is still let directly by landlords to vulnerable tenants where no such support is given and where the consequences of avoiding an agent can be extreme.

My final point, which appears to have been missed by most of recent commentary, relates to buy to let mortgages. The buy to let boom has is supported by lenders keen to secure borrowing against a flexible private rented sector.  Rent controls and longer tenancies (which would serve to restrict a landlord’s flexibility to sell when they want) would discourage investors from entering the market and lenders lending, thereby further restricting supply, resulting in higher rents.

So, knocking a letting agent may be today’s sport but the issues of satisfying growing demand are never going to be easy. Like many industry professionals I believe a better solution would be to introduce a national licensing scheme for letting agents so the rogues are weeded out; add to that real help to build more property to rent and we’ll start addressing the issues that matter and not just the ones that sound good. 


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