5 February 2008

For the fifth year running, agents from around the country attending the annual conference of the Association of Residential Letting Agents, ARLA, heard a plea for government not to regulate the rental market out of business. Instead, delegates heard that the way forward is to licence all letting agents.

The outgoing President of ARLA, Robert Jordan, told the 700 delegates packed into the conference held in West London today, Tuesday 5 February, "The Private Rented Sector has delivered over 2.7 million homes to rent, without a penny piece of incentive coming from government".

However, he cautioned the new Housing Minister, Caroline Flint, and PM Gordon Brown, "One step too far on the legislative bandwagon and you will kill off the Private Rented Sector."

Mr Jordan was referring to the continuous implementation of small pieces of legislation that in themselves are not arduous but cumulatively make for cumbersome administration that many believe could drive responsible landlords out of the market.

"The government's own figures may suggest that there are over half a million landlords in the Private Rented Sector but the market cannot afford to lose any of them, particularly in troubled times," he said.

He also pointed out that Buy to Let, the great success story of the past ten years and invented by ARLA, had brought in investors who have re-financed nearly half the rental market and provide accommodation for well over one million households. At the same time, it was filling the pension's gap for policyholders who were let down badly by both the pension industry and by government.

Mr Jordan reminded his audience that it is only off-plan and new build speculation, particularly with flats in large blocks in the metropolitan areas, that are the primary cause of the problems in the market.

"This speculation is not, and never has been, Buy to Let," he stressed. "It is greedy speculators believing a small deposit and rapid capital growth would allow them to flip the contract and make a killing."
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Delegates were told that licensing of all lettings agents is the solution to bad practice in the rental market, especially as flat house sales will encourage other, insufficiently-qualified agents to go into lettings as a survival mechanism.

"This is a very great worry, because if agents are not already involved and qualified they could be a risk to the market. Unqualified agents, together with amateur landlords, are responsible for the majority of problems in the private rented sector. The missing link is that government should bite the bullet and licence all lettings agents and landlords."

Mr Jordan explained that licensing does not have to be a bureaucratic sledgehammer to crack a relatively small nut.

"The professional bodies have the resources and the ability to licence all lettings agents. Such a scheme does not have to cost the government anything."

Delegates were reminded that in an effort to persuade the government of the absolute need for licensing, the professional bodies, ARLA, NAEA and RICS, have joined together and appointed Sir Bryan Carsberg to carry out a root and branch review. Sir Bryan will report later this year.

"We very much hope that this report will support our view on licensing," Mr Jordan said.

Lord Richard Best, previously the Director of the Rowntree Trust and now Chairman of the Hanover Housing Association and Council Member Ombudsman for Estate Agents, pointed out to Conference that the Private Rented Sector falls outside the remit of any regulator.

"Constraints, safety nets and quality controls do not apply to private landlords," Lord Best said. "Lettings agents, who act in place of landlords, will not be covered by the new Consumers and Estate Agents Redress Act.

"Fortunately bad landlords are as unpopular with the professional organisations as they are with tenants' rights organisations and the honourable bodies representing reputable landlords are as keen as anyone to promote codes of conduct and accreditation schemes."

Lord Best said that the timing is right for the Housing and Regeneration Bill to include measures for the regulation of private sector landlords, as well as housing associations and council landlords. He commended the Law Commission report that advocates a self-regulatory regime whereby anyone wishing to be a landlord or letting agent must be a member of a professional body or an approved accreditation scheme.

"These schemes require participants to adhere to a proper code of conduct and those who fail will face sanctions," Lord Best argued. "For serious non-compliance, expulsion will prevent property owners from being landlords at all."

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