Client Account Closures - another lettings body demands action

A second lettings sector body is demanding government action over the problem of client account closures.

Accreditation service Safeagent says the government needs to demonstrate that it backs the private rental sector by ensuring that agents can operate with stability and confidence whilst upholding the highest industry standards.

Chief executive Isobel Thomson says: “To ensure the proper functioning of those operating within the PRS, it is imperative to address the challenges that agents face concerning the sudden and unexplained closure of their client accounts by banks.

“These accounts securely hold landlords' rental income and tenants' deposits, as is legally required, and we have seen a a number of instances where these accounts have been subjected to unexpected closures, significantly disrupting business operations.

“The current situation forces agents to navigate a labyrinth of obstacles when attempting to open new client accounts with other banks; most notably the stringent criteria set, rendering the process nearly unachievable for many agents, especially small businesses.”

Thomson says that if the government is committed to elevating industry standards within the PRS, swift action must be taken to address this pressing issue. 

“The inability of lettings and management agents to access reliable and compliant client accounts hinders their ability to operate effectively and ethically, undermining the Government's goal of fostering a thriving and secure rental market” she concludes.

Yesterday Propertymark announced it had written to Chancellor Jeremy Hunt pushing to reduce barriers for letting agents to operate.

For several years banks have been withdrawing access to pooled client accounts - sometimes called undesignated client accounts -  because the authorities claim they are a risk to their compliance with Anti-Money Laundering Regulations.