What does the 'new world' of regulation mean for estate and letting agents?

What does the 'new world' of regulation mean for estate and letting agents?

In one of the most ground-breaking industry announcements for many a year, the Regulation of Property Agents (RoPA) working group finally released its 54-page document proposing root and branch reform of the agency industry in mid-July.

But what did the working group's findings recommend, how did the industry react and what will all this mean for agencies across the UK?

All change, please!

The proposals, which will dramatically change the way estate and letting agents are regulated, trained and licensed, came from the RoPa working party, set up last year by the Ministry of Housing, Communities and Local Government and led by crossbench peer Lord Richard Best.

The recommendations are understood to have already been signed off by MHCLG and are expected to form the basis of legislation in the near future, perhaps after the new Prime Minister has settled in and the Brexit impasse has been resolved one way or another.

Lord Best, the working party's chairman, told trade publication Estate Agent Today that one of the key proposals - a new regulator - is set to be achieved within two years. The independent regulator would lead a new public body to oversee a new regulatory regime for property agents.

What's more, those who are regulated will have to be licensed by the new regulator, while the regulator will also be responsible for an overarching statutory code of practice.

Additionally, the working party recommended a new 'modular' approach to qualifications. This would enable 'agents to become proficient in those aspects of property agent work as suits the needs of their role and career, subject to minimum requirements'.

It also said the new regulator is central to 'a system of enforcement and redress which takes on the support of national and local trading standards, of redress schemes, and of professional bodies'.

A new regulatory framework

The proposals, which will create a new regulatory framework to cover estate agents in the UK and letting and managing agents in England only, are designed to ensure everyone operating in the industry is sufficiently qualified, licensed and adhering to a code of practice

It will mean all agencies operating a residential property business needing to be licensed, with the licensing process including a fit and proper person test. All customer-facing staff employed within a residential agency business would also need to be licensed and adhere to a Code of Practice, while all customer-facing staff employed within a residential agency business should hold a qualification at Level 3 (equivalent to an A-Level), preferably with directors qualified to Level 4.

How did the industry react?

In a joint statement, Mark Hayward, chief executive of estate agency trade body NAEA Propertymark, and David Cox, chief executive of lettings trade body ARLA Propertymark, welcomed the final report.

"This is a significant moment for those in the property industry and a huge leap forward in stamping out bad practice," it said. "We have long called for government intervention to ensure everyone in the industry is licensed, adheres to a strict code of practice and holds at least a Level 3 qualification (A-level). Following the extensive considerations by the working group, it is now for Government to create the structures for a properly regulated industry, whose professional knowledge and skills are trusted and respected by all."

They also warned, though, that agents will need to prepare. "These are substantial changes which will require agents to start making preparations now to ensure that they are well placed for when these proposed qualification requirements are introduced."

"While we anticipate that the need for property qualifications will be phased in, we advise agents to get ahead of the competition and to stand out by adopting the new requirements early."

The Royal Institution of Chartered Surveyors (RICS) also welcomed the proposals. "Ensuring consistent minimum standards across the sector for agents is vital to upholding the public interest. That's why the RICS congratulates Lord Best, working group members and the Ministry for these sound recommendations," its chief executive Sean Tomkins said.

David Pilling, head of lobbying and policy at redress operator Ombudsman Services, which was the only redress provider to be involved in the working group, said the recommendations contained in the RoPA report 'have the potential to make a significant and positive difference to consumers'.

He added: "We think the proposed regulatory body could play a key role in fostering a culture of openness, transparency and accountability across the property agent sector – ultimately raising standards and improving outcomes for consumers."

A new era of professionalism

The recent proposals mean that standards in the agency sector will be raised to a higher standard than ever, with everyone in the industry needing to be licensed, regulated and fully qualified.

To ensure your agency is as professional and compliant as it can be, it's crucial that you have a smooth, well-functioning software system in place, which enables you to keep on top of your diary, office, staff, valuations and accounting all in one place, at the click of a button.

With the extra things to consider – coming in at some point in the near future – such as licensing, adhering to a new code of conduct and making sure all your staff are adequately qualified to carry out the job they are doing, good tech processes, and in particular top-quality property software, are more vital than ever to ensure your services are streamlined, efficient and effective.

That means one less thing to worry about and can enable you to concentrate on providing a professional, expert, fully regulated service to your clients.

You'll also need a slick, user-friendly website which reflects the fact you are a serious, professional agent. This, and all-in-one, cloud-based software, is something that Gnomen can provide.

To discover more about what we can do for you, please call 0208 123 9019 or book a free demo here.

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Montana H.

Business Development Director
I'm Gnomen's Business Development Director, passionate about all things related to tech and property.

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