Labour bid to regulate agents welcomed by major industry body

The Property Institute has welcomed a Labour Party move to introduce the regulation of property agents across much of the sector.

Tabled by Shadow Minister members of the Public Bill Committee, Matthew Pennycook MP and Mike Amesbury MP, there is an amendment to the Leasehold and Freehold Reform Bill to bring in the recommendations of the Regulation of Property Agents (RoPA) working party within two years of the Bill becoming law.

The Property Institute is calling on the government to take the opportunity presented by the current Bill to introduce a regulatory regime for the property management sector. 

It says that if government lacks the appetite to deliver robust regulation, then at the very least it should protect consumers by mandating minimum qualification requirements and publishing a statutory code of practice for property managers. 

In 2019, Lord Richard Best published the RoPA report that set out recommendations to uphold standards for all managing agents and drive incapable and unfit agents out of the sector. The Property Institute argues that since the report, the urgency to address the situation around standards in the sector has become far more pressing and is asking the government to consider its proposal for mandatory regulations. 

It suggests mandatory qualifications will drive out problematic and unethical operators.

The government has already made qualifications mandatory for social housing managers in June 2023. The Institute now wants the government to close the gap and mirror mandatory qualifications for property managers managing blocks of flats in the private sector, says that all residents need to be protected from inadequate operators and bad practices - regardless of tenure.

Property Institute chief executive Andrew Bulmer says: “It is more important than ever that the millions of residents in multi-occupancy buildings are served by competent, ethical, and regulated property managers. Everyone, regardless of tenure, deserves to live in a safe and well-managed home. I was pleased to be able to emphasise our call and the need for regulation of the sector to the Public Bill Committee recently and we welcome any opportunity to work with the government to see regulation of the sector come forward.

“Many buildings are mixed tenure, with both social and private homes, so the inconsistent approach to mandatory qualifications between the tenures is confusing. Furthermore, vulnerable residents don’t just live in social housing – they live in privately owned or rented homes too. As a minimum, all property managers must demonstrate competence through mandatory qualifications. The current situation cannot be allowed to continue whereby a minority of property managers are unqualified and provide a poor service, leaving repairs outstanding, and residents at risk.

“The competence of property managers directly impacts the safety, financial security and wellbeing of millions of people. Competence must be assured for all residents and cannot be a lottery any longer.”

There are an estimated 3.5m leasehold flats in England, managed by residential property managers, and they are often tall and complex buildings. This represents around 14 per cent of all residential homes in England.

Residential property managers provide services such as health and fire safety, maintenance of the common parts, and manage the finances of the building. In leasehold blocks they may hold substantial sums of leaseholder money, such as reserve funds.  

Despite such important responsibilities, and associated complex legislation to navigate, residential property managers are not currently required to hold any qualifications to demonstrate competence. While many do so voluntarily, too many do not.