In this short article we look at the risks from the current approach and how you can use the ongoing uncertainty to grow your business.
The Background
We are in the unusual position that calls for regulation by an industry, its representatives, consumers and their representatives are falling on deaf ears. Without action on a national level we are seeing the spread of regional regulation.
As noted by J-P Martins, Head of Business Development at Lomond Capital the industry needs:
“Simple regulation with one code and one regulator across the UK”
The Political Context
The private rented sector (PRS) is increasingly under the spotlight as political parties recognise that the quality of accommodation is a key issue for an increasingly important voter segment.
While raising standards in the PRS is the (common) stated aim across the major political parties, clear light can be seen between them as to how this should be achieved.
The Coalition Government believes that consumer (landlord and tenant) education, the enforcement of existing consumer protections and a (voluntary) gold standard of accreditation will push demand and the market towards higher quality.
The Labour Party has been vocal in supporting the formulation of new overarching regulation.
The Risk
If, as we fear, voluntary standards do not achieve the goal of raising standards then the creep of mandatory regional accreditation and varying levels of enforcement will continue. Those variances breed uncertainty and (for national operators) higher costs, and greater confusion for consumers.
Susie Crolla CEO of The Guild of Letting and Management noted:
“At the moment any regulation would be beneficial. The industry has been waiting since the publication of the Rugg Review in 2008 for something to happen.
The landlord has a lot of legislation to abide by, yet there is very little enforcement. Then there are so many agents who adhere to nothing – they are fly by night and take advantage of consumers, landlords and tenants alike. Mandatory redress of letting agents is a start, the London Rental Standard will not be compulsory and many local authorities have opted out of selective Licensing.
It appears that the Welsh Assembly are taking regulation to the level required.”
What’s Next
Subject to any further delays we are only a couple of months away from the expected launch of the London Rental Standard and the national Tenants’ Charter.
Both measures are to be accompanied by a marketing campaign and education process for tenants on their rights.
What You Can Do Now
As the spotlight falls more intensely on the lettings industry, agencies that benefit most will ensure that their quality shines through in their marketing materials and personal communications with landlords and tenants.
Rajeev Nayyar MD of Smart Repairs System Fixflo has the following suggestions for letting agencies:
"Review your existing marketing materials (including your website) to position your agency at the front of your local market. Messages that highlight the quality of your service will increasingly resonate with customers as the Government’s marketing campaign on standards rolls out. Send bulletins to your active and former landlord base to inform them of the changes that are coming and the steps you have taken to enhance transparency, together with details of your membership of trade bodies and a redress scheme."
Expert advice is of heightened value in periods of change. By highlighting the impending changes you can reassure existing customers of your expertise and help to drive demand for both your let only and managed services.
View from the Industry
Sally Lawson, CEO of Concentric Lettings stated:
“Lettings is an unregulated industry, however many landlords seem oblivious to this fact and put a lot of faith in agents as a result.
Because of the lack in regulation there is such a huge variance of standards across the a regulated licensed agent who is a member of ARLA for example and some non regulated agent, yet landlords chose agents, based on price, assuming we all offer the same service, this is not the case. For tenants their choice of where to move to is at even more at risk, as they choose where to go, based on who has the property they want.
They along with the landlords “trust” that all agents offer a similar service and that all that will be taken care of.
However anyone can set up a letting agency, with no training or structure to their set up.
I was asked yesterday to work out the cost of being a compliant agent compared to a non-compliant agent and I must admit I was quite shocked myself at the additional costs.
As an agent, this is why we welcome regulation across the board, to bring a national standard to the industry, to stop this variance in service and to drive out those not prepared to comply with regulations. This way the industry as a whole will operate much better, no matter where you live.”
