The Decline of Letting Agents, Harmful for Landlords and Tenants

More letting agents are going out of business. The pandemic continues to wreak havoc, not only hurting the letting agents but also putting landlords and tenants in potential harm.

These developments are bad news for the tenants who have not signed up in the money protection schemes.

Statistics reports from the Property Redress Scheme show that from March to July, a sharp 66% of letting agents ended their redress membership. These persons have revoked their membership because they no longer trade.

The money protection scheme was put in place 18 months ago. It was a legal requirement for letting agents to protect all parties involved. However, some landlords and tenants are still uncovered.

Client Money Protect, a membership scheme for property protection believes we will continue to see an increase in insolvent letting agents brought on by the pandemic.

A source from the company said: "It is now 18 months since it became a legal requirement for all letting agents to have client money protection.

"Most people know when they book a package holiday to check it is ATOL protected, meaning if the holiday firm goes bust, they do not get stranded abroad or end up out of pocket.

"However, people often part with far greater sums of money when they let or rent a property and yet they don't check that this money is protected.

"The lettings industry must work harder at educating consumers on the importance of checking their letting agents will protect their money."

A Call for A Minister of Renting

In the spirit of protection and security, property firms have expressed and written to the Prime Minister and the government. The request: appoint a Minister for Renting.

Property developers who signed the letter are Love To Rent, Folio London, Arcadia and Hera Property.

The letter hopes for Bori Johnson to make the appointment to "oversee and raise standards for millions of people currently in rental accommodation, much of which is not fit for purpose and to enforce standards on landlords who do not comply and to encourage and play a part in the growing build to rent sector which has the ability to improve lives for the future."

The UK population has 28% currently living in private rental accommodations.

Love To Rent CEO, Anne-Marie Brown said:

"Rented accommodation requires different governance than home-ownership, yet when both are being handled by the same Minister, they often focus predominately on increasing rates of home-ownership to the detriment of the rented market.

"Younger generations are becoming increasingly less reliant on private ownership in favour of rental properties that provides a secure and flexible lifestyle and this demand is only set to increase, as the build-to-rent sector continues to flourish."

Brown believes that with the shift on the profile of renters, the agenda should be refocused on improving renter conditions, security for landlords, and overall good health of tenancies.