My Lords, it gives me considerable pleasure to be responding to the noble Baroness, Lady Hayter, who will probably remember only too well that not so long ago we debated a number of Bills with some vigour. This amendment would introduce provisions under which cover for money received or held by lettings agents in the course of business, generally known as client money protection, would be mandatory. I hope that at the end of my remarks I can offer a little light at the end of the respective tunnels for particular Lords, if I may put it that way.
I am aware of some support within the housing sector for this measure. That has been reflected in interventions from the noble Lords, Lord Palmer and Lord Foster. But I am concerned that requiring lettings agents to belong to a client money protection scheme will introduce burdens and costs into the sector that could have implications on rent levels. Instead, this Government’s approach is to encourage lettings agents to adopt client money protection without the need for regulations. I shall explain.
We have already legislated through the Consumer Rights Act 2015 to require lettings agents to be transparent about whether they offer client money protection. Transparency raises consumer awareness and encourages landlords and tenants to shop around and choose an agent based on the level of service that it provides. I recognise the importance of client money protection. This is why in our guide on how to rent we champion the SAFEagent scheme—a kite scheme, in effect. This helps landlords and tenants easily to identify agents that offer this protection by the display of the SAFEagent mark. I accept that participation is voluntary but estimate that at least two-thirds of agents already offer client money protection. At the moment, to introduce mandatory client money protection would be a step too far and overburden a market that is perfectly capable of self-regulation. The balance of regulation for lettings agents is now about right. We need to allow time for the transparency measures to which the noble Lord, Lord Foster, alluded to bed in.
We shall review the impact of the transparency measures later this year. I reassure all noble Lords, and in particular the noble Lord, Lord Foster, that this review will be taken seriously and that we intend to work closely with our industry partners and representative groups to develop this review. I hope that this explanation reassures noble Lords and that the noble Baroness will withdraw her amendment.