Regulating the Letting Agent
December 8, 2009
Is it to do with the changing society, people’s values or an over zealous government, that whenever there is a problem that hits the news the answer that is proposed is usually more regulation?
The property market is a case in point – whether it relates to estate agents, mortgage brokers or investment companies. Maybe I am yearning for an era that never really existed, but why can’t people act in an appropriate way? Why does it require many hours of meetings, committees and drafting to come up with regulations that are unneccessary if people used good old fashioned common sense?
Maybe it is people’s greed. It is frustrating when regulation is introduced and ignores fundamental points. When the mortgage market was regulated, why were only residential mortgages covered? To ignore buy-to-let mortgages seems bizarre. Surprise surprise, there is a drive now to regulate buy-to-let mortgages!
The other old favourite for regulation is estate agents. As there is a difference here between letting agents and sales agents, it is the handling of money that needs to be considered. With the latter, solicitors are involved. Therefore all monies and documents that are required go through the solicitor. Yes there is a question around advice that an agent gives, however, as with any ‘sales’ person you need to do your own research. There are good sales agents that will guide you through and give good guidance, but ultimately the decision is yours.
As regards residential letting agents, solicitors are rarely involved. The letting agent deals with the monies and documents. There is regulation around the holding of deposits, but beyond this there is little. Your decision needs to be based on reputation, trust and industry recognition. However, many people don’t spend enough time doing their research and get caught out when it is too late.
Unfortunately, I do feel that estate agents require regulation because there are firms out there that do not share the values of trust, honesty and integrity. When mortgage brokers were regulated some years ago it did result in many unscrupulous ones closing down – I believe this would also be the case with Estate Agents.
In conclusion, there are cases where regulation is required, and that is where society has taken us.