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News & opinion

18 JUL 2019

RICS response: regulation of property agents

RICS’ influence in decision-making has again been recognised, with the report into the regulation of residential agents in the United Kingdom including a number of our recommendations.

We welcome the report's recommendations as we believe it will raise the bar across the sector and increase consumer trust.

RICS has long called for the consistent regulation of residential property agency in the UK and welcomes the recommendations of the working group. If implemented well, making best use of the available resources, they will bring positive change and will increase public confidence in the sector parts of which have been likened to the 'wild west'.

Sean Tompkins, RICS, CEO, comments: "The process has helped to highlight the leadership that RICS demonstrates through our long-standing commitment to upholding the public interest, through effective, independent regulation. This is clearly reflected in the report, which has recommended that the new state regulator should be able to delegate regulatory functions to a professional body which can show sufficient regulatory independence and competence in that area.

"Housing is central to the welfare of society, so ensuring consistent minimum standards across the sector for agents is vital to upholding the public interest. That's why RICS congratulates Lord Best, working group members and the Ministry for these sound recommendations.”

Approximately 2,700 RICS regulated firms in the UK undertake residential sales, lettings agency, and/or property management. These firms, and individual RICS members in the sector, are subject to regulation by RICS. These, however, represent just a fraction of the overall residential agency sector.

One of the specific recommendations relating to a consistently regulated and more unified sector, is that agents should be subject to a single, consolidated residential property code, in the form of an overarching high-level set of principles with additional sector specific requirements (covering sales, lettings and block management). RICS agrees with this approach, which follows the framework of many of our existing internationally adopted standards and guidance documents. We now intend to build on the existing RICS led publications to produce a consolidated draft code for the Regulator to consider, and look forward to working closely with the profession, sector partners and consumer interest stakeholders as we develop this.

Housing is central to the welfare of society, so ensuring consistent minimum standards across the sector for agents is vital to upholding the public interest.

Sean Tompkins

We are also pleased to note Lord Best has supported our recommendation that the new regulator should have the powers to delegate regulatory functions to selected designated professional bodies (DPBs), where they can show they have an independent regulatory function, and demonstrable capacity to work in the public interest.

RICS is already recognised as a DPB by the Financial Conduct Authority, and already has independent and trusted regulation in place, (latest survey shows 4 out of 5 people – 80% - trust the RICS to regulate effectively to protect the public and the profession), positioning RICS well to play a key role in the future regulation of residential property agents.

With regard to RICS qualifications, we are working to obtain recognition for the relevant RICS professional membership grades (chartered and associate), within the new regime and the recommendations published. We are also considering the development of a range of RICS vocational qualifications to meet the new licensing requirements, and to provide a stepping stone to gaining globally recognised RICS professional status.

We encourage Government to take steps to implement the findings of the report, which will help to bring greater consistency and, ultimately, increase public trust in the agency sector.

We very much look forward to working with MHCLG and, in due course, the new regulator, to design the overarching framework and play our part in delivering the assurance, client protections, guidance and information that are essential underpinnings of public confidence.