More industry regulation needed - but not if it alienates agents

A leading figure in the PropTech sector says more regulation could make the rental sector fairer, more transparent and ultimately more profitable to agents - but with certain conditions.

Critically, such changes must not alienate letting agents or landlords.

Those views come from Neil Cobbold, managing director of automated payment service PayProp.

They come just days after new property listings regulations were announced by the National Trading Standards Estate and Letting Agent Team, and less than a fortnight since the Levelling Up White Paper put forward by the government and confirming radical changes to renting, including a mandatory landlord register and scrapping S21 evictions.

“Landlords and agents are far more likely to be on board with changes if they feel that their concerns are being heard. Too much of the rhetoric around rental reform is about how one group or the other will be harmed, or the potential dangers of over-regulation, but good tenants, good landlords and good agents have more in common than what sets them apart – and ultimately, they need each other” explains Cobbold.

He says he’s pleased that major stakeholders are being consulted ahead of a specific Rental Reform White Paper coming this spring in England, and for there Scottish Government’s ‘A New Deal for Tenants’ proposals. 

“In itself, there is nothing wrong with new regulation, when it is done for the right reasons. The most respected professions and industries in the world have high levels of regulation and lots of checks and balances in play” Cobbold says.

“At the same time, regulation works best when it is used to improve standards, not as a disincentive to certain parts of a sector. In recent weeks we’ve seen people in the industry warn that measures such as the 3% stamp duty surcharge, the phasing out of mortgage interest relief and the Tenant Fees Act are causing landlords to quit, intentionally or not. 

“Councils will also need the resources and expertise to enforce new rules consistently. Landlords and agents will quickly lose faith in the regulations if they feel that there isn’t a level playing field.”

According to the PropTech entrepreneur, landlords in particular are worried about costs.

“While many will be supportive of reaching net zero, proper support systems will also be necessary to ensure that getting there is realistic and affordable for landlords,” he claims. “Well-designed regulations could have pretty broad support, but you equally risk alienating an important demographic in the fight against climate change if they feel they are being punished or driven out in some way.”

Cobbold says it’s vital that collaboration is the main watchword, to better regulate the industry while also allowing landlords and letting agents to grow, thrive and drive up standards.