Letting Agents

Debate between John Healey and Mark Prisk

Wednesday 27th February 2013 Westminster Hall

[Mr Prisk]

People will be encouraged if that is confirmation that the Labour party, were it to be elected in some strange manner in a couple of years’ time, will have rent controls. We will see how that develops, but perhaps I should persist, because other hon. Members have raised questions.

Targeted, effective regulation that is carefully thought through, of a statutory nature or otherwise, has a role to play. That is why we have made a particular effort to crack down on rogue landlords, for example, in the case of beds in sheds, which is a dreadful scourge. Frankly, too little has been done in the past. It is an area where people are genuinely exploited and where we want to use the law. That, in a sense, comes to the second question.

Various people have asserted in this debate that letting agents are completely unregulated, but that is not true. That is a myth, which it is important to dispel. We should not be telling tenants that they have no controls and that there is nothing there to protect them and no one to turn to to help them challenge someone who is behaving badly. Whatever our political perspective might be, there is a genuine interest in getting the message right.

Letting agents are subject to regulation. It is important to flag that up. The hon. Member for Sheffield Central (Paul Blomfield) highlighted a specific issue around students and the fact that they were being told incorrect things about market conditions. The Consumer Protection from Unfair Trading Regulations 2008 offer protection against someone who is deliberately misleading and pulling the wool over people’s eyes, enabling individual tenants the opportunity to challenge them.

Also, the Unfair Terms in Consumer Contracts Regulations 1999 protect tenants from unfair conditions. Several hon. Members mentioned the way in which tenants can find themselves facing unfair restrictions on the way in which they can use a property. We have seen—several hon. Members have mentioned this—that trading standards bodies can and will prosecute letting agents. I mentioned a case in West Bromwich in a previous debate and we have heard about a case in Rotherham. In Oxford, a letting agent had to pay £300,000 in fines and costs for consumer protection-related and money-laundering offences after failing to return tenants’ deposits—which several hon. Members have mentioned—letting properties without the authority of their owners, and not passing on rent. So action can be taken. There was a similar case in Plymouth, where the letting agent was jailed for two years for spending client money on foreign holidays—again, that was mentioned by one hon. Member—and propping up his business. That individual may yet face further action to seize his assets. So, serious sanctions are in place, which our constituents can now use. It is important to flag that up.

[John Healey]

That is a statement of fact, not an argument against proper regulation. The overwhelming evidence mentioned by everybody in the debate is that what is in place at the moment is not successful, not sufficient and not satisfactory to protect tenants and landlords. A statement of fact about the general consumer protection that is in place is not sufficient.

[Mr Prisk]

It is important to recognise that we need a number of elements to deal with the different problems that have been raised. We need to make sure that we use existing consumer protection legislation now and that enforcement is put in place effectively. I want trading standards bodies to take action not just in the serious cases, such as those that I have flagged up, but in the less serious cases. We have a problem with enforcement. The right hon. Gentleman is right. We cannot mandate trading standards bodies to act in individual cases, but I am determined to encourage those national bodies to ensure that they tackle these issues right across the marketplace. It is not good enough at the moment. We want to make it stronger.

As the hon. Member for Rotherham said, many letting agents who provide services do so quite well and within the law. Several hon. Members have highlighted the Which? report, which showed that one in five tenants are dissatisfied with their agent. That is still too high, but I think that if it is one in five, people will realise that the vast majority—four out of five—seem satisfied with the service that they get. The Which? report is a pretty independent and extensive survey in that context. However, there remain too many agents whose service is poor and unacceptable. Several hon. Members, including the hon. Member for Birmingham, Erdington, mentioned the fact that this is the second lowest of consumer markets.

Our view has been that regulation should not be the first option. Although we recognise that there might be a case for it, the challenge is to make sure that existing law works properly. There is a temptation among all of us as politicians to believe that passing new legislation will deal with people who currently ignore existing regulation. I am sceptical that the changes we make, of a statutory nature or otherwise, will actually catch the rogues that Members of all parties have highlighted. That is the challenge. I am open to consideration. We are looking carefully at what the Office of Fair Trading has said. There are some strong and positive elements there. However, if we are to do this properly—if we are to catch the rogue agents and landlords who perfectly happily flout every other law—we need to make sure that if we change the rules and change the law, we do so in a way that will deal with the individuals in question.