Unlike most government housing policy, with its return to prefabs and right to buy, the business of lettings has most certainly not gone full circle. It has gone straight down.
There was a time when letting agents were seen as the cream of the residential property sector. Probity and attention to detail were the watchwords of the lettings business, and being pilloried by no less than the Chancellor of the day was totally inconceivable.
Until deregulation of the PRS with the 1988 Housing Act and the advent of buy-to-let, lettings was largely run by women who, often, were looked down upon by estate agents as merely working for pin money. In fact, a great number of these “pin-money ladies” were hugely successful and highly influential, particularly as lettings burgeoned during the nineties.
It is also worth pointing out that they were successful at a far more complex business than estate agency. Unlike sales agents, not only did they have to achieve a deal, they were totally responsible for legally binding agreements, rents, deposits and client’s money. They did not need to hand over such sensitive and often complicated issues to solicitors.
But then, in the first half of the nineties, estate agents, having scorned lettings or only allowed small lettings departments in their back rooms on sufferance, began to take an interest. This was not surprising. Not only was the lettings industry growing but sales were crashing.
This led to large chains being formed, combining sales with lettings to cover the downturn and provide employment for legions of shiny-suited middle managers and accountants.
And as the ethos of letting homes to people and the concept of personal care began to wane, the original pillars of the lettings scene became disillusioned or were sidelined.
This led to a lack of committed agents who could see rental properties as homes for people, who read inventory reports and tenancy agreements with care, who considered all of this as part of the job and were content to take their commissions in return rather than look for profit centres in everything they did for their clients.
Instead, mark-ups on everything, once the provenance of banks and City solicitors, became the norm, while the value of the work actually dropped. Credit referencing by superficial box-ticking became acceptable.
Gimlet eyes no longer double-checked inventories (at the expense of both landlord and tenant) and tenancy agreements were no longer written for the circumstances of the property, the landlord and the tenant.
Cheap credit referencing means virtually nothing now. Inventories, too, are often tick-box exercises, while tenancy agreements are a ‘one size fits all’. All of this makes it difficult to have pride in the job or to fight off the rapacity of the line manager looking to meet targets.
What is certain is that the astonishing level of the mark-ups in a tick-box culture does not produce the same level of service.
While this observation certainly does not apply to all letting agents, it is little wonder that the pressure groups campaigned so successfully against “fees to tenants” even though they were not describing fees but on-costs. But, of course, on-costs that cost the tenant dear.
What is surprising is that the professional bodies so significantly failed over the last few years to counter that these items are on-costs not fees, and also that their members should not remain members if they continued to allow these profit centres simply to be cash cows.
As a result of this failure, the souring of the reputation of letting agents – once the cream of the property market – is now complete.
They have made it to the Chancellor’s Autumn Statement. The Autumn Statement! Anything less venal would have been the subject of far less draconian regulation by a housing minister at most.
* Malcolm Harrison is a former spokesperson for ARLA