Government considers mandatory Client Money Protection

The government has announced in its Housing White Paper that it is still “working with industry experts” to consider whether Client Money Protection should be compulsory.

A consultation period closed in the autumn on the proposal for CMP schemes to protect client funds held by letting agents, providing landlords and tenants with the opportunity to recover their money in the event it goes missing. 

The government estimates that between 60 and 80 per cent of agents already voluntarily offer CMP, quoting industry figures that letting agents hold almost £3 billion in client funds.

Elsewhere in the White Paper - released yesterday - the government announced it was also considering whether it should make electrical safety checks mandatory for rental properties. 

In addition to reiterating its desire to open a database of ‘rogue landlords and agents’ with enhanced rights for them to be banned if they are serial offenders, the White Paper’s reference to the private rental sector concentrated on tenancy durations.

It states: “The predominant use of six and 12 month contracts can mean that families who are renting need to move home before they had planned to, which can mean children moving school, alongside the uncertainty and costs associated with taking on a new rental property.” 

It continues: “According to a Shelter report last year an estimated 65,000 families say that they were forced to move their child’s school the last time they moved within the private rented sector. We are proposing to make the private rented sector more family-friendly by taking steps to promote longer tenancies on new build rental homes”. 

Few specifics have so far been released.