The House of Lords Industry and Regulators Committee has urged the Government to go ahead with the creation of a regulator for property agents, four years after it pledged to do so.
In a letter to MP Michael Gove, the committee warned that the government’s delay is impacting tenants, leaseholders and others, who continue to be exposed to malpractice.
After hearing evidence from campaigners for leaseholders and tenants, professional bodies representing property agents, the Property Ombudsman, the Leasehold Advisory Service and National Trading Standards, the committee found:
A new regulator would make a significant difference by raising standards in the sector and taking proactive action against agents who engage in poor practice.
Current forms of enforcement and redress are reactive and have a limited scope.
The Leasehold and Property Law Reform Act does not sufficiently address the issues faced by leaseholders and needs to be supported by more regulation.
The committee therefore calls for:
Legislation to establish a new regulator, or at least a fully published government response to the report of the working group that recommended its creation;
Mandatory qualifications for real estate agents, including ethical dealings with consumers;
Codes of practice for the sector, drawn up by the new regulator, aimed at achieving good outcomes for consumers;
A Memorandum of Understanding must be agreed between the new supervisor,
National trading standards and the redress arrangements to ensure cooperation and avoid duplication;
The government must legislate for statutory consumer representation in the sector to ensure their views are loud and clear;
The government should adopt a single ombudsman for real estate agents, rather than two competing schemes as at present;
The new regulator, after initial government support, will fund its activities through fees, levies or a levy on those it regulates.
Baroness Taylor, chair of the Industry and Regulators Committee, said: The Government has been inaction for four years by failing to act on the report of the working group it set up. In the meantime, the impact of poor regulation is being felt by tenants and leaseholders, and the sector remains in limbo.”
She added: “I have also informed the Secretary of State that we would have appreciated a minister from his department providing oral evidence to the inquiry.”