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News & opinion

10 APR 2018

New regulations for residential professionals

The government has introduced new measures to professionalise the estate agent market, coupled with the same efforts in the managing and letting agents market.

Improving the home buying and selling process

Following on from a recent consultation on the topic, the government has committed to:

  • requiring estate agents to hold a professional qualification
  • requiring estate agents to declare fees receive for referring clients to solicitors, surveyors and mortgage brokers
  • encouraging the use of voluntary reservation agreements to help prevent sales falling through and crack down on gazumping
  • setting a timeline for local authority searches so buyers get the information they need within 10 days
  • requiring managing agents and freeholders to provide up-to-date lease information for a set fee and to an agreed timetable
  • strengthening the National Trading Standards Estate Agency Team so they can carry out more enforcement activity which includes banning agents.

Regulating letting agents and property managers

Alongside regulating estate agents, the government has also set out proposals to regulate letting agents and management agents. This includes:

  • establishing an independent regulator and code of practice for letting and managing agents
  • letting and managing agents will be required to obtain a nationally recognised qualification to practice
  • make it easier for leaseholders to challenge unfair fees and service charges.

The suite of measures announced in both areas are broadly in line with the RICS’ response to the consultations. However, throughout the consultation process, and in the lead up to these announcements, RICS has continually called on the government to think about regulation of the sector holistically, as the same agents that are selling properties are often also the agents letting and managing them. Although these announcements are complimentary, more thought needs to be given on how these changes will fit together.

Professionalising the sector, by requiring qualifications and setting standards, will help to ensure consumers are properly protected, but only if those standards are effectively regulated at an individual and organisational level.

RICS has its own minimum standards for professionals working in those sectors and believes anyone involved in the buying, selling, renting and managing of our homes should be operating to the highest professional and ethical benchmarks. By introducing obligatory accreditation, regulation and continuous learning, the industry will improve the consumer experience and drive out bad practice.

However, the government needs to recognise what our industry is already doing, such as the PRS Code which RICS is working jointly to produce with industry stakeholders. Working with us, the government could quickly and economically achieve its aims, rather than reinvent the wheel.

RICS will continue to work with the government to improve professionalism and ensure consumer interests are at the heart of the system.