The Association of Residential Letting Agents (ARLA), the lead professional body for the private rented sector, has been calling on government to license all agents for some years now. ARLA believes that the Consumer Bill was the proper vehicle for the introduction of controls over the large sums of unregulated money. It could also have served the consumer across various health and safety and ethical issues, including the right of redress.
A £12 billion cash flow would make city fund managers drool and it would be very carefully regulated. However, yet again, government has let unregulated letting agents off the hook by failing to legislate for licensing or any other form of control.
The Consumer Bill, announced in the Queen's Speech, contains no consumer safeguards for landlords and tenants using over 8,000 unregulated agents. These are the letting agents who, between them, handle £12 billion a year in rents, drawn from property assets worth £250 billion.
Adrian Turner, Chief Executive of ARLA, commented: "This is a lost opportunity to protect the consumer in that part of the private rented sector where the professional bodies cannot reach. We can only control our own members and they are less than half the total number of agents out there. However, using the government's own figures, the lack of regulation or control over rents worth £12 billion is easily worked out. 8,000 unregulated agents have an average portfolio of over 150 managed properties, each with an average rental value of £650. It is astonishing that there is no monitoring or policing of these huge volumes of money, as is done in the self-regulated sector."
ARLA calculates that a typical unregulated local letting agent with around 150 properties on their books will be handling over £30 million in rent from managed and let-only properties every year with no qualifications, no compliance controls and no system of redress. All of these monitoring and policing methods are only guaranteed to be in place with properly accredited members of the professional bodies.
