London mayor Boris Johnson has announced plans for a major new voluntary accreditation scheme for landlords and agents, the ‘London Rental Standard’.
The proposals, which do not include rent controls but do suggest that all letting agents become members of an ombudsman scheme and offer client money protection, are now out for consultation, with a launch due next year. The scheme will be carefully watched by other authorities across the UK.
In London, the aim is to increase the number of accredited landlords and letting agents to 100,000 by 2016. Eventually, tenants would have access to a register to check whether a landlord or agent is accredited.
Approximately one quarter of all Londoners – equating to 800,000 households – live in private rented accommodation, with the proportion predicted to grow to 30% by 2025.
Johnson has steered away from any form of mandatory licensing, saying that the private rented sector has not yet exhausted its capacity for self-regulation.
The document details 12 core commitments, including minimum expectations around protection of deposits, provision of contact details, emergency and urgent repairs response times, property conditions, complaints handling, fee transparency, as well as courses for landlords and letting agents offering training and development.
Although 68% of Londoners say they are either satisfied or very satisfied with their landlord, the Mayor said he wants to establish a set of universal standards that tenants should expect from any accreditation scheme.
He is also proposing incentives for landlords to join, which could include discounts on services, and is planning to support the establishment of private sector tenant groups who can hold their landlords to account.
Landlords will be invited to take part in a pilot to test how they can offer tenants longer contracts and greater certainty over rent increases. Johnson will also seek funding from the Government’s £200m fund for new ‘build-to-let’ private rental homes, and launch a competition for the best-designed purpose-built private rented accommodation.
Where letting agents are concerned, Johnson expresses concerns, saying there are currently limited avenues for redress when things go wrong. He is also concerned about the charges and fees levied, and says that because agents are not transparent about these, tenants and landlords are not able to shop around. He wants agents to agree to publish their charges on their websites as part of their accreditation.
A future aim would be to insist that agency staff undergo training as a prerequisite to accreditation.
Johnson also makes it clear that he would listen to other proposals, including making all agents belong to ARLA.
Letting agents should, says the document, be transparent about their fees and charges; belong to an ombudsman scheme; and offer client money protection. In effect, this last requirement would mean that agents would have to belong to one of the trade bodies.
Johnson said: “The vast majority of the capital’s landlords provide a highly professional service, but with a vast array of accreditation schemes there is a strong case for landlords and letting agents to get round the table to agree a set of ambitious standards that will empower them and their tenants.
“Boosting supply, not burdensome regulation like rent controls, is the key to ensuring that the sector remains a significant feature of London’s housing market.
“I will also be looking closely at how we can cater better for the needs of private renters through new developments across the capital that show commitment to truly innovative design.”
Richard Lambert, chief executive of the National Landlords Association, said: “The National Landlords Association has worked extensively with the Mayor’s office and welcomes the proposals outlined in the London Rental Standard.
“The NLA believes that building on existing landlord accreditation schemes is the most effective way of establishing minimum management standards in the capital’s private rented sector.
“Accreditation gives tenants peace of mind in a housing market which can seem daunting to those looking for a place to live, by providing the assurance that their landlord and agent knows what they are doing. Crucially, this is backed up by a specific and robust complaints process in the unlikely event of a dispute.
“We will continue to work with the Mayor and other industry bodies to ensure that Londoners can expect a certain professional standard from their landlord or agent.”
Ian Fletcher, director of policy at the British Property Federation, said: “Ultimately, bringing various schemes together under one Rental Standard will make it more easily recognisable to consumers and therefore of greater value to those signing up. It has our full support.”
Bodies which have worked on the new Universal Standards include the London Landlord Accreditation Scheme, National Landlords Association, National Approved Lettings Scheme (NALS), Association of Residential Lettings Agents, Residential Landlords Association, British Property Federation and Accreditation Network UK.
Currently, accreditation numbers of both landlords and agents appear to be low. NALS has 450 accredited agents in London and ARLA has just 50, according to the document. The London Landlord Accreditation Scheme is easily the most active, with 11,129 accredited landlords and over 800 accredited agents. The National Landlords Association has just 68 accredited landlords in London.
Follow the link to the consultation, which runs until February 15:
http://www.london.gov.uk/housingcovenant
Comments
Plus of course all those who have been parachuted in and never passed a driving test, and who bodies doubtless would also want parachuted into any new scheme!!
IO: "some ARLA, NALS, NAEA, RICS etc etc firms are shocking and frighterningly low"
Agreed. I was training someone who argued on the basis they had passed the ARLA exam..... in 2003. A little learning i9s indeed a dangerous thing.
This is a really interesting thread with so many people going off on the wrong tangents.
The London Landlords Accreditation Scheme is indeed a one day course that teaches the basics. I deliver these courses and generally find that many of the landlords attending are shocked by what they don't know which they thought they did, and realise they need to. And often then do more about it by going on more training courses.
Too many people seem to think being an ARLA member is some sort of universal panacea that automatically grants some sort of integrity and status way beyond what in reality it does. I deal with agents all the time and have done for the past 20 years and can tell you the knowledge levels in some ARLA, NALS, NAEA, RICS etc etc firms are shocking and frighterningly low.
Just one example - I dealt with a deposit dispute case recently where the MANAGER of a 10 office company, ARLA members who are good at blowing their own trumpets, didn't have the first clue about TDP and especially the significance of the PI information.
No-one in this article is directly comparing this with ARLA membership, Non de Plume is right read the report.
Once they have the sticker in their window an awful lot of ARLA firms (and other body members) need to keep on training and updating - anyone care to tell me when ANY ARLA member was censured for example for not having done their CPD, the monitoring and policing of which is a joke?
Try looking at the accredited numbers in the last paragraph for ARLA and NLA and then tell me who is putting in the extra effort - them or LLAS?
Ray - all education is good - but the article appears to suggest the accreditation in comparable with those of the regulators when this is clearly not the case.
On the face of it I think it looks like a good idea, and probably a lot more palatable than full blown legislation from central government to fix the industry.
I agree in part that the current consumer protection laws aren't enforced enough but that won't change unless/until local authorities take the problem seriously and get an influx of cash from CG to fight it.
A one day course for landlords that gives them the basics of a safe, lawful letting has got to be better than nothing at all and might encourage some to look further into their obligations. I find it hard to believe that anyone would think different.
"Richard Lambert, chief executive of the National Landlords Association, said: “The National Landlords Association has worked extensively with the Mayor’s office and welcomes the proposals outlined in the London Rental Standard."
Really?
STOP PRESS *** NLA agrees all agents should join ARLA"
Excellent. For once we agree - :)
London Landlord Accreditation Scheme One Day Course
The training is intended to follow the natural progression of a tenancy from beginning to end. It will cover all the main areas that a landlord should know in order to operate a successful business:
The preliminary requirement.
How to set up a tenancy.
How to prevent problems occurring during a tenancy.
What do if things go wrong.
What to do at the end of the tenancy.
Hang on a minute.... The London Landlord Accreditation Scheme?? Its a ONE day course (10am start, couple of hours for lunch...) - rather like a PADI experience in the hotel swimming pool.
To imply this is similar to RICS, ARLA etc is bonkers.
"There is plenty of consumer protection legislation already, the only problem is that it is not enforced! "
In part. The problem is that Landlords still hunt for the cheapest fee without realising the risks and tenants get screwed over by hidden charges and dont want to kick up a fuss in case they get a bad reference.
This is about education and consumer awareness - a good thing.
The figures regarding the number of parties who are accredited is insane and disingenuous.
"How do I become an accredited landlord?
You need to attend a one-day development course, agree to follow a code of conduct, and to be a fit and proper person."
A ONE DAY course....... in the same breath as ARLA, NALS and NLA???
Its like the difference between a first aider and a Doctor.
Am I the only one who thinks that this is a load of political tosh?
There is plenty of consumer protection legislation already, the only problem is that it is not enforced!
There is little real need for more, more, more, as some seem to continuously advocate.
So, Boris's two primary objectives are:
• far greater transparency about letting agent fees so that landlords and tenants have clarity about the fees that they are expected to pay and the service that they can expect
in return
• a means of independent redress when disputes occur between agents and landlords or tenants.
Shelter want the same. They are fundamental principles of ARLA. NALS, RICS and endorsed by SAFE. TSI, OFT, TPOS etc.
It seems the only people who don't agree are those who don't comply for whatever reason.
"Letting agents should, says the document, be transparent about their fees and charges; belong to an ombudsman scheme; and offer client money protection."
Anyone who doesn't agree should not be trading.
I appreciate some family firms have been trouble free and run very tight, compliant businesses since time began - but there needs to be a set of minimum standards to stop the rogues hiding behind such a facade.
My father was a good driver, but never took a test. Times change and so must the industry.
The devil is in the detail. Before organising a lynch mob, READ the actual document - specifically page 29 - and douse those torches.
"An alternative or complementary approach would be to require all letting agents to belong to the Association of Residential Letting Agents (ARLA), which has a robust
code of practice covering many of the issues of concern to tenants and landlords.
It is not within the Mayor’s powers to make such changes, but he is willing to carefully consider proposals that seek to improve the operation of the letting agent market in London while also seeking to keep red tape and additional costs to an absolute minimum"
It sounds like a sensible plan.
At present, all schemes are voluntary. This is simply an extension into the PRS and should be welcomed to protect tenants.
I take the point about Solicitors, Mortgage companies etc, but this includes PRIVATE individuals which doesn't apply to these services.
I agree its a good thing for the PRS
2 wrongs dont make a right. Solicitors must provide terms of engagement with their charges clearly displayed. Too many agents have hidden costs buried in terms of business.
Transparency is good - the attitude that others do it is worng - lets lead the way.
Well done Boris. The Government wont legislate because if they do, many independent agent will be exposed for dipping into clients money and many, many people (aka voters) will lose money.
Anything which presents a dichotomy of those who play by the rules and protect the consumer and those who do not is a good thing.
Has Boris lost the plot or is he sponsored by Shelter? Why can tenants not ASK about costs before proceeding? Do solicitors, mortgage companies, estatee agents have all THEIR charges shown on their websites?
As for all agents must belong to ARLA well that rules out online agents so expect many law suits if this plan goes ahead.
Boris, get on one of your Boris Bikes and off the bandwagon!