Client Money Protection to become compulsory following ARLA Propertymark Conference

Letting agents who do not comply with Client Money Protection will be fined or forced to cease trading

On 28th March, Cheffins lettings agents attended the annual Association of Residential Lettings Agents (ARLA Propertymark) Conference at the ExCel Centre, London. The event is the largest lettings conference and welcomed Lord William Hague and ITV Political Editor, Robert Peston as keynote speakers.

 

Sarah Bush, Director, Cheffins comments: “The main news following the event was that Client Money Protection (CMP) is going to become compulsory for all lettings agents. Under new plans announced, agents found to be handling client money without having CMP will either be fined or forced to cease trading. This announcement is following over two years of lobbying from ARLA in an attempt to further regulate the industry and ensure financial protection for clients. CMP safeguards both landlords and tenants monies in the event that the funds are misappropriated or the letting or property agent goes into administration.  This comes as welcome news to the industry and further highlights the importance of always using an ARLA Propertymark-registered agent. Currently the industry holds approximately £2.7bn on behalf of tenants and landlords and it is essential that this money is protected at all stages of the lettings process.  

Another subject tackled was the imminent ban on letting agents’ fees. Research conducted by ARLA Propertymark and Capital Economics has shown that these costs will be reflected onto the tenant via the landlord and are likely to increase rents up by from £103 to £275 on average per year, whilst putting approximately 4,000 jobs in jeopardy. As the consultation begins on how this ban will work it is likely that the impact will be reflected on tenants, landlords, the private rented sector and also the wider economy. The research also found that should costs be increased for landlords, approximately 27 per cent of landlords will not buy any further rental properties, whilst 20 per cent would sell their portfolios and 7 per cent would spend less on property maintenance. The result of these changes will always ultimately impact on tenants as a diminishing supply will increase rental values.  

With over 9,000 delegates in attendance on the day, using an ARLA Propertymark-registered agent was also an important topic discussed. We cannot stress enough the importance of using an ARLA Propertymark-registered agent for both landlords and tenants. As one of the only property firms locally which ensures each office has at least one registered agent we all too often have clients who have had bad experiences with rogue agents, often causing large financial losses. By being formally regulated, professional trained and up to date with complex legislative changes and best practice, ARLA Propertymark agents will protect the best interests for both landlords and tenants every step of the way.”

Sarah Bush, Director and Head of Lettings can be contacted on 01223 271980.

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