Mandatory financial protection needed to improve renting sector
As landlords now own more buy-to-let properties than ever, the rental sector is in danger of becoming oversaturated with landlords either unwilling or unable to keep their properties meeting a minimum set of standards. It has therefore become clear that a lack of regulation in this industry means that any tenant who make uninformed decisions about where they live are likely to suffer the consequences of an unpleasant living experience for the duration of the tenancy.
Over the past couple of months, however, the UK Government has introduced a series of measures aimed at improving the regulation of lettings and estate agents and the management of rental properties. At the beginning of October, it became a legal requirement for all lettings and estate agents to register with an approved redress scheme. While this move highlighted the role that regulatory bodies play in ensuring that the rights of both tenants and landlords are provided for, it also raised awareness at some of the other major issues plaguing the private rental sector. Currently, the Consumer Rights Bill is passing through the House of Lords, and SAFEagent has taken this opportunity to call upon the government to further their cause in making it a legal obligation for all management agents to be a part of a Client Money Protection (CMP) scheme.
Protecting the investments of tenants and landlords
A CMP scheme ensures that, once money has changed hands, both the tenant and the landlord will be compensated should their management firm misappropriate or fraudulently use these funds. Throughout the economic recession, reports of lettings and estate agents collapsing whilst owing their clients hundreds of thousands of pounds were a stark reminder of the importance of money protection schemes. Two years on, and almost four years after the launch of the SAFEagent campaign, becoming a member of these CMP schemes is still optional for all agents, meaning that many tenants and landlords still run the risk of losing their money due to the actions of their letting and estate agents.
Offering additional consumer protection
The voluntary basis of joining a CMP scheme has been criticised by John Midgley, SAFEagent chair, who notes that while the government has been making positive steps towards improving the standards of lettings and estate agents, it does not make sense that agents are not required by law to operate an account specifically for client money. This means that, in some cases, money belonging to the management agents, such as their fees, is kept in the same account as that of their clients, including rental costs from the tenants. In this regard, it can be easy to lose payments or misappropriate funds and if this should happen, there is no guaranteed financial security for the consumer. Similarly, if the agent should go out of business, for whatever reason, the consumer also risks losing their money.
At CPS Homes, we are proud members of industry regulating bodies such as ARLA, The Property Ombudsman and Landlord Accreditation Wales. We only have our customers’ best interests at heart so whether you’re a landlord buying a HMO property in the student-centric areas of Cathays and Roath, or you’re a tenant looking to rent a property in the heart of the city centre or Cardiff Bay, if you choose us, you can be safe in the knowledge that your money will always be kept secure with our Client Money Protection policy.
If you have any questions about our accreditations and memberships or our properties currently available for rent then please don’t hesitate to get in touch with the team at any of our three Cardiff branches or through our Facebook, Twitter or Google+ pages.
