My Lords, on Report we debated the amendment in the name of the noble Baroness, Lady Hayter, on letting and managing agents. I made it clear then that the Government could not accept her amendment but that we were giving most serious consideration to the issue of redress. The noble Baroness confirmed that it was a redress mechanism that she was seeking in her amendment.
The Government have given serious consideration to these issues. We have considered reports by the Office of Fair Trading, Which?, the Royal Institution of Chartered Surveyors and others, and we have listened carefully to the debate here and indeed in the other place. The Government recognise that the fact that not all agents belong to a redress scheme has been an issue of growing concern. We are satisfied that making this a requirement would provide both the means of addressing complaints when things go wrong, and a means to improve service quality across these important parts of the housing sector.
Providing access to redress would deal with many of the failings that people are concerned about in their day to day dealings with letting managing agents. At the same time, the existing consumer protection and leasehold legislation remains in place and is already available, and is indeed used for the more serious matters.
Having listened to the concerns raised most specifically in this House by the noble Baroness, Lady Hayter, and others, including my noble friend Lady Gardner, the Government have introduced in the other place an amendment in lieu of the amendment tabled by the noble Baroness, Lady Hayter. The government amendment gives powers to require letting and managing agents of privately rented and residential leasehold homes to belong to a redress scheme. It gets to the heart of what the noble Baroness, Lady Hayter, was seeking, but without subjecting letting and managing agents to the additional layers of regulation that are in the Estate Agents Act and on which her amendment was based.
I am pleased to say that, while clearly some would have like the Government to have gone further than redress, this amendment has been warmly welcomed and was approved without Division in the other place. Indeed, the honourable Member for Streatham, shadow Business Secretary Chuka Umunna, described it as,
“a victory for tenants and landlords””.—[Official Report, Commons, 16/4/13; col. 229.]
The Government’s approach has also been welcomed by key organisations. For example, the National Approved Letting Scheme welcomed it as a common-sense approach to improving the consumer experience of renting and letting, and a sensible alternative to the heavy handed bureaucracy of a formal regulatory regime. Similarly, the National Landlords Association has endorsed the Government’s approach of meeting the challenge of
regulating agents head on, rather than simply the standards of estate agency to a distinct sector with its own significant risks.
If these clauses are enacted, the next steps will be for the Department for Communities and Local Government to consult on the details of the measures and to go through the formal scrutiny processes so that the necessary orders can be brought forward for approval in both Houses. We would expect consultation to be under way, certainly by the summer.
In their consultations, the Government will wish to take account of a number of the points that have been raised in the other place, for example on how existing codes of practice will be reflected in the redress schemes. There were also questions in the other place about the residential leasehold sector, generally echoing concerns that have been raised by my noble friend Lady Gardner of Parkes. The Department for Communities and Local Government is taking forward work on these issues, following its recent round table meeting, which my noble friend attended. I know that it will continue to involve my noble friend and a broad range of other interested parties on these matters.
My honourable friend in the other place, the Housing Minister, Mark Prisk, has spoken to the honourable Member for Worthing West about the points that he raised on the leasehold advisory service and has now written to him.
The Government consider that this amendment can make a real improvement to the operation of letting and property management agents, for a very modest and proportionate regulatory burden. I am grateful to bodies such as the Office of Fair Trading and Which? for rightly bringing attention to these issues, and to noble Lords who have worked hard to bring these measures within the current Bill, in particular the noble Baroness, Lady Hayter, and my noble friend Lady Gardner. I also acknowledge my honourable friend in the other place, the Housing Minister Mark Prisk, who has a long-standing interest in this issue and has worked hard to deliver a workable redress mechanism within the current Bill.
I therefore ask that noble Lords do not insist on their amendment and instead agree with the other place on its amendments in lieu. I beg to move.