Rental agencies should be tightly regulated

To let and to rent signs are becoming more and more common these days. Picture: Ian Georgeson

Conservative estimates suggest that there are around 150,000 homes now rented out privately, with lettings agents managing about half of that figure.

That puts lettings agencies in charge of billions of poundsworth of assets: assets that for many represent hard-earned savings, a family home, or even a retirement income.

Yet, to date, adherence to any regulatory scheme has been voluntary and poorly policed.

Being relatively new to the industry – I’ve been in post less than year – and with the perspective of consumer business, I find that fact quite staggering.

Enforced legislation and tighter regulation not only set the bar, they raise standards. For a sector that is not without its critics or its failures, it must be time to change.

This is not about wanting to impose bureaucracy on small companies or an emblematic stamp of approval; this is about a modern business approach that must respond to the market it is in; have the confidence to stand up to scrutiny and adapt.

The Housing (Scotland) Bill that is currently going through parliament makes recommendations for the operation of the private rental sector and seeks to regulate lettings agents formally for the first time, which I applaud. A new code of practice is expected as part of any new legislation.

But I would go further. Expertise within the industry needs to be recognised with formal qualifications and there needs to be a benchmark for good governance, including the handling of client money. A licence to operate, with penalties for those who fall short of the standards required, should not be out of the question.

With stricter controls in place, there is a framework for increasing the knowledge and awareness of landlords and tenants, setting the right expectations for people and their homes.

Not everything is going to happen at once and every lettings agency will have to face up to new and different challenges.

However, the steps taken now will embed greater trust and improve the reputation of the industry all round.

• Malcolm Cannon is CEO of Braemore Lettings