Dianne Hayter explains why the spotlight is now very firmly on the practices of letting agents
Labour’s commitment to give rights to consumers was reinvigorated recently in Ed Miliband’s Fabian Society speech, when he highlighted the importance of a better deal for tenants in the private rented sector. This is a sector currently comprising 17% of housing stock but likely to rise to 20% by the time of the next general election. 3.6 million people rent privately, with two thirds of them going through letting agents.
Ed called in particular for an end to families being ripped off by letting agents – along the lines of amendments I moved last week to the Enterprise & Regulatory Reform (ERR) Bill. These are being given added impetus today in the Commons when Labour MPs will call for letting and managing agents to up their game by having a complaints procedure, professional indemnity insurance and to join a redress scheme.
My ERR Bill amendments got widespread support in the Lords, including from Lord Deben (former Tory Minister John Selwyn Gummer) who, quite rightly, said that this was not an issue of regulation but one instead about consumer rights: “It is the possibility of a consumer having a perfectly reasonable way of ensuring that they get fair do's”. With his support, and that of others across the House, we should be able to amend the Bill at Report stage, such that all letting and managing agents must belong to an Ombudsman Scheme (as is already the case for estate agents), and that the Office of Fair Trading (OFT) is able to ban those who act improperly.
In Opposition, Conservative MP Mark Prisk moved near identical amendments. As Mr Prisk is now the Housing Minister, we await the government’s response with interest. During the Financial Services Bill, Ministers resisted our attempts to improve consumer protection, defeating by 3 votes my amendment to force the industry to sign up to a Code of Conduct; and by doing so, dismissing notions that those who look after our money should have a duty to put consumers’ interests first. In the ERR Bill, they have refused to countenance our call for a Consumer Panel to advise the new Competition and Markets Authority.
When push comes to shove, it is clear that Ministers’ priorities are with the producers or service providers over the customers. But in this instance, it is not a question of users (tenants or landlords) against the industry. My amendments are strongly supported by the Association representing letting agents, and by the Chartered Institute of Housing, the British Property Federation, Royal Institute of Chartered Surveyors, the Federation of Private Residents Association, the National Association of Estate Agents, the Southern Landlords Association, the Institute of Residential Property Management, and the Association of Residential Managing Agents. And they also have the support of organisations such as Which? and Shelter, along with the two Ombudsmen Schemes, fed up with not being able to hear complaints against those 40% of letting agents which refuse to join such a scheme.
Unsurprisingly, it is the good agents who voluntarily belong to a Redress Scheme and the problem ones who will only respond to legislation. There is a real mischief at the moment in that any Estate Agent banned by the OFT can open up the next day as a Letting Agent – dealing often with far more vulnerable customers and, unlike Estate Agents, handling client money.
Consumer rights are vital to a fair society. The question now is whether the government will come alongside Labour on this measure?
Baroness Dianne Hayter speaks for Labour on consumer affairs issues in the House of Lords
Published 23rd January 2013
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