England ‘should follow Scotland’s lead’ on regulation of property agents
A report by the working group on the regulation of property agents’ (ROPA) which proposes increased regulation, minimum qualifications, and the formal licensing of agents should be welcomed, according to a property management firm.
Apropos by DJ Alexander believes that these recommendations, which are being presented to the UK government today, would remove some of the worst practices in the sector and create a better regulated, fairer, and more equitable system.
David Alexander, joint managing director of Apropos by DJ Alexander Ltd, said: “Scotland already has a more regulated sector with agents required to be registered and the key decision makers qualified. However, rather than destroying the sector this has made it stronger and more effective.
“Lord Best, who chairs the ROPA working group, said that these recommendations could lead to some agencies closing but would create a better industry. What is interesting is that Scotland, which has already been through all these changes including a code of conduct which was introduced in 2017 which is also now being proposed for England, now appears to have a more financially stable property management sector.
“The number of companies entering formal insolvency procedures involved in real estate activities in Scotland fell in 2018 to its lowest figure since 2007 with just 17 companies going bust in the whole year. By contrast the number of real estate companies failing in England and Wales reached its highest level in four years in Q1 2019 with a total of 121 and the year as a whole looks likely to be similar to the previous peak which occurred during 2014 when 522 companies entered insolvency.”
Mr Alexander added: “It should be remembered that these increasing failure rates in the sector are occurring before the impact of the Tenants Fees Act, or the proposed ending of no-fault evictions and open-ended tenancies have come into place. The sector must understand that greater regulation is coming, and the best property management companies are already prepared and ready for the changes which will occur. Those who aren’t prepared are undoubtedly going to face financial difficulties in adapting to the new way of operating.
“For those who want to work in a well-regulated, fairer, and mutually beneficial system where the tenant, landlord and agent all work together then the introduction of greater regulation, qualifications for staff, and licensing will hold no fears because they realise that this is the right way forward. For those who think this is unjust interference and added bureaucracy then the future does not look so bright.”
He concluded: “There is little doubt that property management is changing and at a pace that few would have envisaged a few years ago. But such change offers potential, which will be challenging, but will also be rewarding for those who understand and appreciate the need for this change. The best in our business will embrace the need for such changes while others will fall by the wayside. My suspicion is that the insolvency rate in England and Wales will, unfortunately, continue to rise over the next few years as those who fail to adapt will ultimately fail while those who embrace change will thrive.”