Property Agents: Registration — House of Lords, 2017-10-18
Topic: Housing
Nicholas Bourne (Conservative, Centre-right): With the leave of the House, I shall now repeat a Statement made in another place by the Minister for Housing in the other place. The Statement is as follows: "With permission, Mr Speaker, I would like to make a Statement on a call for evidence on protecting consumers in the letting and management agents market. When our Housing White Paper was published in February, we committed to taking action to help people already on the property ladder or living in rented accommodation. The Prime Minister has also announced billions of pounds of funding for new affordable homes, including homes for rent. We are also taking action to create a fairer property management system that works for everyone. We have already announced plans to regulate letting agents, including banning fees for tenants, and we have made it clear that we want to see an end to the unjustified use of leasehold in new-build houses The time has now come to address service charges. As the number of leasehold and private rented homes has grown, so the market for managing agents has boomed. According to one estimate, annual service charges alone now total as much as £3.5 billion. While these managers provide an important service, the system in which they work is simply not suited to the modern age. Tenants and leaseholders, even some freeholders on new-build estates, hand over their money and receive services in return, but they have little or no say over which agent provides them or at what cost. This matters because, while the majority of agents are honest professionals committed to delivering a high standard of service, a near-total lack of regulation has led to the growth of a market where, in places, standards and safety come second to the pursuit of profit. We have seen reports of broken windows being repaired with cardboard and sticky tape, and of damp and mould simply being painted over. One landlord was billed £500 by his agent for repairing a shower door, while a group of leaseholders were charged 10 times the market rate to have a new fire escape fitted, with the £30,000 contract for the work being handed to the property owner’s brother You do not need any qualifications, training or experience to call yourself an agent. You do not need a criminal record check, and you do not even have to know what a managing agent does, so it is no surprise that some experts believe that such agents are overcharging by as much as £1.4 billion every year Today, we are setting out plans for fixing the problems in property management. We are publishing a call for evidence which outlines the challenges facing the sector, proposes some possible solutions, and asks for the views of the people who know the market best—people who work in it or who pay the service charges. As part of this new call for evidence, government is seeking views on three key elements: first, whether regulatory overhaul of the sector is needed; secondly, measures to protect consumers from unfair costs and overpriced service charges; thirdly, ways to place more power in the hands of consumers by giving leaseholders more say over who their agent is The sector has done some good work to raise standards already, but there is more to do to professionalise the sector and root out poor practice. Through the call for evidence, we shall take views on whether we need an independent regulator to oversee property management. So today, the Government are asking everyone who pays service charges and everyone who receives them to share their views on what is wrong and how we can fix it. We want to give power back to consumers, give agents a clear and consistent framework to operate in, and give landlords, renters and leaseholders the confidence they need to know that agents are complying with the rules. As we build more homes, we need the right people to take care of them. That is why it is important that government acts to recognise what works in the sector and fix what does not Today’s announcement is about delivering better value and services for tenants, leaseholders and hard-working people across the country. The call for evidence, which will be open for six weeks, is the first step in creating a property management system that works for everybody. I commend this Statement to the House" My Lords, that concludes the Statement.