Housing Minister Mark Prisk has promised legislation to bring residential lettings agents within the scope of The Consumers, Estate Agents and Redress Act, for better consumer protection.
The move has been welcomed by The Property Ombudsman, Christopher Hamer, as a positive step to raise consumer protection by giving access to an independent disputes resolution mechanism and also an opportunity to raise standards across an industry thought to handle £14 billion a year, earning £1 billion for itself in the process.
The government's proposal will oblige letting and managing agents and those agents engaged in leasehold management to offer landlords and tenants access to an approved redress scheme.
Mark Prisk's move comes on the day the House of Commons was to be asked to vote on an amendment to the ERR proposed by Baroness Diane Hayter and supported in the House of Lords that would have brought lettings agents within the scope of the Estate Agents Act 1979 and therefore within the scope of CEARA.
But Mr Prisk, following meetings with TPO and other organisations within the residential property industry, now proposes to bring forward his own legislation that will meet demands by requiring lettings agents to provide redress but not making them subject to EAA.
The Property Ombudsman, Christopher Hamer, and chairman of the TPO operating company, Bill McClintock, are accepting an invitation to help Mr Prisk bring about his legislative changes in the shortest possible timescale once ERR passes into law.
Mr Hamer said: 'I have been pressing for such a change for a number of years and I therefore very much welcome the government's approach to this important element of consumer protection. I supported Baroness Hayter's proposed amendment which would have resulted in a similar outcome.
'In discussion with the Housing Minister, I was aware that he fully understood that regulation of letting agents was a relevant issue. Whilst full regulation is not yet on the agenda the introduction of compulsory redress brings about a level playing field for the industry and it will mean that a consumer has access to independent dispute resolution regardless of which agent they use.
'I look forward to working with the Minister as the government consults on the introduction of the legislation.'
Bill McClintock, Chairman of the TPO Board who represents TPO member firms, added: 'The industry has been fully behind tougher legislation which puts control on the operation of letting agents - more than 60 per cent of firms in the sector have already joined our scheme voluntarily.
'Our concern has always been the protection of consumers from the activities of agents without any commitment to redress and this commitment from Mark Prisk is a real opportunity to harmonise legislation for agents and consumers alike and will be welcomed by the industry.'