Letting agents licensing launched

The scheme will cover all members of the Association of Residential Letting Agents (Arla), the sector's professional and regulatory body.

There is currently no licensing scheme for letting agents, but 95 per cent of consumers believe there should be, according to research conducted by Arla.

It reveals that both tenants and landlords are increasingly falling victim to cowboy letting agents guilty of failing to protect their money; not having professional indemnity insurance in place to protect consumers; and offering poor advice to landlords.

In some instances, according to Arla, letting agents have failed to advise landlords of their legally required deposit protection responsibilities, which can result in tenants losing their deposit and landlords being fined.

The association, which has some 3,500 member offices throughout the UK, also highlighted the lack of an independent redress scheme for consumers in the event of problems.

Ruth Lilley, head of membership and professional development for Arla, said: "For too long the rental sector has been seen as the black sheep of the property market, with a lack of regulation and a requirement for redress to protect the consumer when the agent's failings are to the detriment of that consumer."

Lilley, who claimed the scheme would set a "gold standard" for letting agents in the UK, said Arla had been lobbying the government for the past decade to help it establish better industry standards. The scheme will be introduced in the House of Commons by Ian Wright, parliamentary under-secretary in the Department of Communities and Local Government, who said consumers would benefit.

As of today, all Arla members will be required to adhere to a strict code of practice, be part of an independent redress scheme and have professional indemnity insurance in place.

Under the scheme, members will also have to hold professional lettings qualifications, protect all tenant and landlord funds held by their office and independently audit their clients' funds.

Simon Gordon, head of communications at the National Landlords Association, welcomed the news, saying: "Letting agents are in a particular position of trust between landlords and tenants and their practices must be above reproach.

"The Arla licensing scheme should go a long way to ensuring consumers are protected from poor letting agents and improve the image of the sector as a whole."

Arla's sister organisation, the National Association of Estate Agents, is to establish its own licensing scheme later this year.