Communities and Local Government CommitteeSupplementary written evidence from the UK Association of Letting Agents

Thank you for your letter of 17 April 2013, asking for UKALA’s views on the Government’s amendments to the Enterprise and Regulatory Reform Act.

UKALA has welcomed the Government’s amendments to the Bill in broad terms. We believe that they represent a considered first step to providing greater consumer assurance in the sector without succumbing to the temptation to simply extend the Estate Agents Act 1979 provisions to letting agents. While the willingness of the House of Lords to accept the earlier amendments proposed by Baroness Hayter represented a very positive step, we had significant doubts about the suitability of simply extending the scope of existing regulation.

There are considerable differences between the relationship between estate agencies and their clients and that between letting agents and theirs, whether landlord or tenant. While it is true that access to impartial redress would prove beneficial, we believe that the protection should go further, and take into account all aspects of the lettings business.

Specifically, UKALA believes that the legal requirements should mirror the model successfully operated by the letting agents’ trade bodies. This would ensure that every agent offering letting or management services provides:

(i)Access to impartial redress.

(ii)A comprehensive suite of financial protections, including client money protection insurance, professional indemnity insurance and deposit protection compliance.

(iii)Assurance that an industry agreed code of practice is followed at all times, backed by appropriate enforcement in the event of a breach.

These assurances are already available to any letting or management agency wishing to build them into their business cost effectively through membership of a professional body such as UKALA or ARLA.

Failure to provide these service elements would result in exclusion from membership of the relevant trade body. Similarly, if a letting agent were found not to have one or more of these in place, the business should be barred from future activity in the lettings markets.

I trust this provides you with the additional evidence you need. I am happy to elaborate further if that would help the Committee.

May 2013