Licensed to Let

By: Colin Campbell

Landlords and the private rented sector received a boost last week as the National Association of Estate Agents announced that it was introducing a licensing scheme for the industry. It is hoped that the enterprise would help to improve and regulate standards within the sector by protecting tenants and landlords from rogue or unprofessional agents.

At what is now considered the only housing route for many, the lettings industry is littered with instances of tenants and landlords falling victim to rogue agents who have set up shop at the height of the housing shortage only to scam and relieve landlords and tenants of deposits and rents, then quickly closing shop only to open elsewhere and under another name.

Most recently, there have been reports of illegal subletting in Barking. One family lost control of their two-bedroom rented home while it was being renovated. They were threatened by the squatters who claimed to be paying £600 a month rent for the property. A next-door neighbour had also lost his home to squatters which he managed to reclaim once the intruders had fled. The Metropolitan Police are said to be seeking suspects believed to have posed as an estate agent to fraudulently sublet properties.

Sim Sekhon, spokesman for the landlord and lettings service and support network ‘Legal 4 Landlords’, said earlier this week:

“The private rented sector up until now has not been regulated.  As a result, rogue agents have been allowed to operate without much hindrance, bringing down the industry and placing the vast majority of responsible and professional letting agents into disrepute.  The NAEA’s licensing scheme is a welcome initiative that hopefully will put a stop to criminal and negligible behaviour.”

Speaking at the launch in the Houses of Parliament NAEA Chief Executive Peter Bolton King said: “Thousands of people entrust one of the most important transactions in life to people who are not qualified or experienced. We would like all sellers and buyers to ask prospective agents. ‘Do you have a licence?’ If they don’t, they should ask themselves whether that’s the best place to market their property.”

The NAEA, which represents around a third of all estate agents in the UK will make the scheme available to its members. In order to hold the licence agents would have to prove that they:

• Hold a recognised qualification.
• Lettings will require a qualified agent
• Are covered by professional indemnity insurance
• Provide accountant’s reports when they hold clients money
• Attend 12 hours of training per year on industry developments.

Licence holders must also adhere to a code of conduct. Those who break the rules could be subject to a tribunal, where fines can be levied for each rule breached.

Housing Minister Grant Shapps, also in attendance at the launch said:
“For years I’ve been calling for better standards throughout this industry, so I’m delighted the NAEA are taking matters into their own hands and launching a licensing scheme that will ensure their members become known for their professionalism and integrity. I call on all estate agents to sign up and make sure they’re not left behind when consumers vote with their feet.”

“This is exactly the sort of measure the housing market needs – simple and sensible changes that are driven by industry and designed to deliver results. By ensuring they enjoy the trust of people buying and selling homes, estate agents will inject greater confidence and movement in the housing market. In future anyone looking to buy a home or sell theirs should ask the simple question of their estate agents – “are you licensed?”

The NAEA hope to have as many members as possible licensed by June 2011, but Michael Jones, President of NAEA said they would continue to call for formal regulation of the sector.