The organisation, regarded as having the foremost standards in the world, wants to see the introduction of professional standards for all agents and says it could generate over £20 million of benefits per year to the UK economy.
Currently, anyone can set up a lettings agency without appropriate qualifications or industry knowledge. RICS says that not only does this mean that tenants and landlords are potentially subject to potentially unscrupulous practice with no come back, but it is also costing the wider economy millions every year.
RICS research shows that, following an initial set up cost of £45million, the much needed regulation of UK lettings agents and the introduction of professional standards for all agents to the industry would provide net benefits of over £20 million per year.
It adds that such new statutory requirements would pay for themselves within less than two and a half years, by avoiding complex red tape while offering the consumer increased levels of protection.
Although agents who sell property are subject to loose regulation, the lettings industry has been allowed to remain unregulated. RICS is calling for the law to be changed to ensure that lettings agents fall under the same scrutiny. When questioned, 90% of consumers agreed that regulation of the lettings industry was much needed.
The issue of lettings agent regulation is moving quickly up the political agenda with both Labour and the Liberal Democrats set to make it a manifesto commitment in 2015.
‘These findings demonstrate exactly why the government needs to act, not just to safeguard the thousands of tenants and landlords who fall victim to unscrupulous practice, but also to relieve pressure on the wider economy,’ said Peter Bolton King, RICS global residential director.
‘It’s encouraging that the introduction of professional standards and new compulsory regulation proposals being sought by RICS, has support from other industry players and consumer groups, and has now received cross party support. But what we need now is action,’ he explained.
‘RICS has long called for a single regulatory and redress system for letting agents, which this survey demonstrates is clearly supported by the overwhelming majority of consumers. Until this happens, we recommend that tenants use a lettings agent that is a member of a professional organisation, such as RICS,’ he added.
