The Government is being urged to consider the financial burden to letting agents once the fees ban comes in, as it draws up plans to regulate the industry.
ARLA Propertymark says agents are already under “unprecedented pressure”.
It says the ban means the industry is facing the loss of around 4,000 jobs and a reduction in turnover of some £200m.
ARLA makes the point in its response to the Government’s “call for evidence” about the planned regulation of letting agents in England.
The Government wants to see all letting agents regulated and required to have minimum training qualifications.
In principle, ARLA agrees with this. Its response makes clear that it believes a new regulatory approach is needed for letting agents.
It says this should also include sales and block managing agents.
ARLA also argues that the focus should be on protecting consumers through transparency of banned agents, and the publication of disciplinary action taken against them.
ARLA reiterates its call for the list of banned agents – now likely to be implemented next April – to be made publicly available.
At the moment, the blacklist is set to be available only to local and central government but not to the public or to agency businesses looking to hire new staff.
ARLA warns that many letting agents are also sales agents, and that there is a “very real danger that a banned sales agent could set up as a letting agent or vice versa”.
ARLA also argues the case for a single code of practice for everyone working in the industry, and says that letting and managing agents should be qualified to a minimum of Level Three – equivalent to an A Level – in order to practise.
The Government should align the timetable for the regulation of agents with its other proposals – to ban tenant fees and to introduce mandatory Client Money Protection.
However, the response shows up just how muddled the Government’s call for evidence is, asking questions about two very different sectors – the lettings industry, and leasehold tenure.
The very first question asked by the Government paper goes unanswered by ARLA, because it is about the leasehold sector rather than lettings.
On the subject of training, the ARLA response is vocal. It says that training courses lasting a day or a week are insufficient for letting agents to grasp the industry of the legislative environment.
It criticises the Rent Smart Wales scheme – introducing mandatory licensing and training for all letting agents – as having set “very low” standards, including a one-day training course.
ARLA says that there should be transitory arrangements pre- and post-regulation: agents who achieved a “suitable” qualification three years before qualifications are made mandatory should be classed as meeting the requirements.
Any agents who have achieved their qualifications more than three years beforehand should have to do 20 hours of additional training.
Separately, as ARLA warns about the effects of the fees ban, the petition placed by agent Rob Farrelly calling for a cap rather than a ban had by yesterday evening attracted over 3,100 signatures.