In summer 2019, details of how estate and letting agents are set to be regulated were revealed.
This was part of Lord Best’s Regulation of Property Agents (RoPA) report.
The report suggested a wide-ranging scope for regulation, including introducing a new independent regulator, mandatory qualifications for agents, licensing for all businesses and a new Code of Practice for the industry.
At the time of the report, it was suggested that the Government hoped to introduce all the measures within two years. So far, progress has been slow and is likely to have been affected by the coronavirus pandemic.
However, in July 2020, the first step towards the recommendations for industry regulation being enacted was made with a Steering Group’s formation to oversee the creation of an industry Code of Practice.
Below, we take a closer look at which organisations make up the Steering Group and what could be included in the new Code of Practice.
Formation of Steering Group announced
The Steering Group, which was formed by The Property Ombudsman (TPO) and the Royal Institution of Chartered Surveyors (RICS), has been tasked with creating a Code of Practice for agents.
The ultimate aim of a Code of Practice is to raise industry standards and protect consumers from unscrupulous operators.
An independent group made up of industry volunteers, and the Steering Group is being chaired by Baroness Diane Hayter, a Labour peer who has previously served on the Property Standards Board and Chair of the Legal Services Consumer Panel.
Speaking at the time of launch, Baroness Hayter said: “The code will ensure that consumers are clear what standards they should expect from property professionals, and it will enable them to be confident that all residential property agents will be held to account in meeting them.”
“The Steering Group is undertaking this work to prepare a Code of Practice for the new Regulator, very much within the public interest. With both consumer representatives and cross-sector support and commitment to achieving this goal of a combined code, it will raise standards and trust in the industry.”
Which organisations make up the Steering Group?
The Steering Group has representatives from the Government and the civil service such as Alison Farrar from Trading Standards, Dallas Banfield from the First Tier Tribunal and officials from the Ministry of Housing, Communities and Local Government (MHCLG).
There are also members from a range of well-known property firms and industry bodies, including:
- Andrew Bulmer, IRPM
- Anthony Essien, LEASE
- Cecilia Brodigan, AHRM
- Chris Norris, NRLA
- Isobel Thomson, Safeagent
- Katrine Sporle, TPO
- Mairead Carroll, RICS
- Mark Hayward, NAEA Propertymark
- Nigel Glen, ARMA
- Peter Habert, TPO
- Tim Frome, PRS
- Steve Harriot, TDS
What could be included in the Code of Practice?
The RoPA report put forward 14 recommendations for best practice, reflected in the Code of Practice. It has been reported that the Code will include sections on ‘Managing Businesses and Staff’ and ‘Dealing with Consumers’. The Code will set out the principles underpinning the standards of professionalism the public should expect of agents and focus on reporting property safety issues and transparency of communication.
Some of the key issues addressed in the Code will include:
- Handling client money
- Conflicts of interest
- Data protection
- Respecting diversity
- Treating consumers fairly
- Training and development
The central Code of Practice will be supported by sector-specific principles covering lettings, property management and sales.
Once the Code is implemented, it is believed agents will need to prove compliance through a mandatory licensing scheme overseen by a new independent industry regulator.
What happens next?
A consultation on the Code of Practice inviting feedback from consumers and the broader property industry was launched in July 2020 and closed two months later.
“Input from consumers, stakeholders, interest groups and the industry is paramount to ensuring that the Code of Practice is balanced, fit for purpose and meets the requirements of a future Regulator,” said Baroness Hayter when the consultation was launched.
The Steering Group will review this feedback, which will then aim to feed additional input into the final version of the Code. Once the final Code has been established, it will then be handed over to the new regulator.
The timeframe for this is at the moment unknown, there have been no updates since autumn 2020.
However, the Code’s development has moved quicker than other parts of the RoPA project so it may be finalised in the next few months.
Following that, the rest of the RoPA report’s recommendations will need to be enacted, so it is likely to still be quite some time before the industry is fully regulated as planned.