woman empty purse

Woman empty purse

Success in Campaign for Mandatory Client Money Protection

My Lords, I thank the noble Baroness and the noble Lord, Lord Palmer of Childs Hill, for their time and commitment to the client money protection review. I am pleased to announce that the Government intend to make client money protection mandatory in line with the recommendation of the review chaired by the noble Baroness and the noble Lord, Lord Palmer of Childs Hill. This will ensure that every agent is offering the same level of protection, giving tenants and landlords the financial protection that they deserve. The Government will consult on how mandatory client money protection should be implemented and enforced.

Lord Bourne of Aberystwyth 
The Parliamentary Under-Secretary of State,
Department for Communities and Local Government and Wales Office

28 March 2017
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One Step Closer To Mandatory Client Money Protection


Measures to make Client Money Protection (CMP) mandatory for all letting agents in England moved a step closer with the launch of a consultation inviting views and comments on how the rules should be designed, implemented and enforced. The consultation posed nine key questions including questions on about minimum levels of cover, the impact on the size of different businesses, whether Trading Standards should enforce the rules and penalties for non-compliance.

The consultation closed on 13 December 2017 and received 117 responses from a range of stakeholders.

1 APRIL 2018

The Government published its response to the consultation on the introduction of mandatory CMP for letting agents. They have announced that legislation will be brought forward to introduce privately-led CMP schemes and civil penalties of up to £30,000 for agents who fail to comply with the scheme.

According to industry estimates, £2.7 billion in client funds is held by letting agents at any one time, currently, CMP is voluntary with approximately 60% of letting agents signed up to a scheme. By making CMP mandatory it ensures that every agent is offering the same level of protection and gives tenants and landlords the financial protection that they deserve.

“After the announcement made during ARLA Conference this year, we are very pleased to see that the Government is moving forward with its plans to introduce mandatory CMP for letting agents. After years of lobbying and a successful campaign alongside Baroness Hayter of Kentish Town, we have finally convinced the Government of the need for this measure. While Propertymark members are already required to have CMP, this new measure will ensure that all letting agents are operating on a level playing field, meaning consumers will be protected regardless of the agent they choose. We are equally pleased that agents will have to display their CMP membership prominently, which will provide tenants peace of mind that their money is protected."

David Cox

David Cox 

Chief Executive
ARLA Propertymark

What is Client Money Protection?

Client Money Protection (CMP) is a compensation scheme which recompenses landlords and tenants should an agent misappropriate their rent, deposit or other client funds. It is a requirement for ARLA Propertymark members to have CMP. 

Leading the Campaign

We have long believed that all letting agents should belong to a CMP scheme because the many agents who do not sign up represent a greater risk to landlords and tenants. 

Furthermore, the reputation of the sector is undermined by the small minority of bad agents who steal from their clients and from tenants.

Making the Case for ChangeWhy It's Important

It’s estimated that £2.7 billion is held by letting agents at any one time including rents and monies to cover maintenance. Of this, it is thought £700 million is not protected, leaving tenants and landlords vulnerable to agents who go bust or abscond.

Tenants are particularly vulnerable. Since 27 May 2015 agents have had to display whether they belong to a CMP scheme. This means that landlords can choose an agent depending on whether they belong to a scheme, but tenants don’t have such choice.


June 2016

Martin Marcus fronted a string of letting agencies and used numerous aliases between 2009 and 2015 to pocket £221,000 from more than 60 tenants and landlords.

April 2016

David Whitefield stole £123,000 from of property landlords. Mr Whitefield pocketed rent and deposits paid by tenants rather than passing the cash to his clients over four years. During this time he put tenants' rent and deposits into the company's 'working capital' account.

Winning the Campaign

Providing Evidence

In August 2015, ARLA Propertymark responded to DCLG’s technical discussion paper, which formulated many policies in the Housing and Planning Act 2016.

Three months later we provided written and oral evidence to the Public Bill Committee in the House of Commons who were scrutinising the Housing and Planning Bill before it became an Act of Parliament. At the oral session our Chief Executive David Cox was asked by MPs to provide further details about the type of amendment we would like to see for CMP. More info...

Drafting an Amendment  

We worked with a number politicians to get an amendment was tabled. The amendment was endorsed by other leading sector organisations.

Read the amendment

Before the Housing and Planning Act 2016 was passed an enabling amendment was added by the Government to give the Secretary of State powers to enforce CMP on letting agents.

Lobbying MPs and Peers

In December 2015, the amendment was withdrawn in the House of Commons, but in February 2016 Baroness Hayter reintroduced the CMP amendment when the Bill was looked at by the House of Lords. Our members wrote to the members of the House of Lords urging them to support the amendment.

In Spring 2016, the Bill went back to the Commons and the Government introduced an enabling power to make regulations to require letting agents to have CMP.

In September 2016, we responded to the CMP Review and David Cox gave evidence to a closed session of Peers in the House of Lords outlining why the introduction of mandatory Client Money Protection for the whole sector is vital.