Letting agents set for regulation

Members of the Arla scheme will have to hold a professional qualification

New guidelines are being brought in aimed at protecting tenants and homeowners who use letting agencies.

The Association of Residential Letting Agents (Arla) is introducing a licensing scheme for its UK members and a code of practice for letting agents.

This would hopefully stop the rentals market being seen as "the black sheep of the property market", Arla said.

Separately, the Times said ministers were planning a registration scheme for private landlords in England and Wales.

Protection

Arla's licensing move has been welcomed by housing charity Shelter and a similar scheme for estate agents is in the offing.

Arla chief explains lettings scheme

Members of Arla's licensed agents' scheme will have to:

• Hold a professional qualification relating to lettings
• Take part in continuing professional development
• Have professional indemnity insurance
• Have plans in place to protect any money they are holding for clients
• Have an annual independent audit carried out on clients' funds.

Under the scheme, if an Arla licensed agent went out of business, any money it owed to clients would be protected.

"Lettings agencies are going out of business and owing their landlord clients thousands of pounds, or even tens of thousands of pounds, in rent," said Peter Bolton-King, Arla's chief executive.

"So this offers protection to landlords in the worst-case scenario."

Deposits paid by tenants were already supposed to be protected under a government deposit protection scheme - though Mr Bolton-King said that this did not always happen.

'Gold standard'

"For too long the rental sector has been seen as the black sheep of the property market, with a lack of regulation and a requirement for redress to protect the consumer when the agent's failings are to the financial detriment of that consumer," said Ruth Lilley, head of membership and professional development at Arla.

GENERAL ADVICE FOR TENANTS Tenants in England can expect: A tenancy agreement That deposits be held by a tenancy deposit scheme That landlords should carry out repairs That landlords should give notice of inspecting or entering a property That rented properties should have a gas safety certificate That they should not be harassed or illegally evicted Source: Shelter England

She added the Arla scheme would "create the gold standard for letting agents in the UK, offering consumers best-practice service and advice - as well as a commitment to the protection of their money".

It has 3,500 member offices across the UK from large multi-branch companies to smaller, single office practices.

The National Association of Estate Agents plans to introduce its own licensing scheme later this year.

Referring to the lettings scheme, Adam Sampson, chief executive of Shelter, said "industry-led best practice" was a "positive step in the right direction".

"All consumers should have the right to expect a professional letting service and have access to redress when problems arise," he said.

However, he added that the government should act to introduce statutory licensing for all letting agents.

GENERAL ADVICE FOR TENANTS Tenants in Scotland can expect: Private landlords to be part of a registration scheme Different rights depending on the type of tenancy they have Extra rights outlined in a written or verbal tenancy agreement Landlords stipulate a notice period before visiting a home That rented properties should have a gas safety certificate That landlords should carry out repairs Adequate fire detection equipment such as a smoke alarm Source: Shelter Scotland

An accreditation system is in place under the management of the National Approved Letting Scheme (NALS). This was set up 10 years ago and aimed at lettings and management agents in the private rented sector.

"This recent development will surely come as a wake-up call to anybody operating in the sector that is not part of a regulatory organisation and cannot demonstrate to the consumer that they meet industry standards in the operation of their business," said Caroline Pickering, who chairs NALS.

Landlords scheme

The Times reported that anyone letting a residential property would have to pay about £50 to register with a national body, under government plans aimed at cracking down on unscrupulous landlords.

Landlords who did not keep their property in good condition could be struck off and have their licence revoked if property was not kept in good condition.

The paper said the reforms would be outlined in a Green Paper within 10 days.

Any government action would follow an independent review into the private rented sector headed by Julie Rugg of the University of York - but a spokesman for the Department of Communities and Local Government would not confirm details of their response.

Private landlords in Scotland are already required to register. However, last week, the charity Shelter Scotland said that rogue landlords were continuing to operate there three years after the scheme was introduced.