My Lords, Amendment 94 is in my name and those of the noble Lord, Lord Young of Cookham, and the noble Baronesses, Lady Hayter of Kentish Town and Lady Taylor of Stevenage, and I am very grateful for their support. Before I speak to the amendment, I want to add my appreciation of the life and shock at the loss of Lord Stunell. Andrew Stunell was a terrific advocate for better housing, as a notable Construction Minister in the coalition Government and an eloquent speaker on a range of Bills, not least the Bill we are debating today, which he analysed brilliantly just a month ago in this Chamber. He will be very greatly missed indeed.
Amendment 94 represents the grand finale in our Committee debates on the Bill. It would empower the Secretary of State to establish an independent statutory regulator of property agents who sell and manage leasehold property. It would introduce into law the recommendations from the Government’s own Regulation of Property Agents working group, which I had the honour to chair and which reported in July 2019. The twin objectives of the regulator would be to protect consumers and to raise standards. Although the working group recommended a regulator for all property agents covering estate agents, sales agents and letting agents as well as property agents handling leasehold property, the amendment relates only to the leasehold managing agents, to keep within the scope of the Bill. However, many property agents involved in leasehold sales and management also engage in sales of freehold properties and in the management of rented sector lettings, so would be covered. Moreover, a twin amendment in the Renters (Reform) Bill, due in this House shortly, could extend the regulators’ role to cover agents managing rented properties as well.
The need for regulation was spelled out graphically at Second Reading, and many of your Lordships have shared details of agents’ misconduct brought to their attention. The unsuitability of badly behaved agents ranges from simply not communicating with leaseholders to misleading them and taking advantage of their leaseholder status with exorbitant commissions, charges and fees, not least in retirement housing developments. Although there are some excellent agents providing a good service and value for money, there are also inept, incompetent and exploitative agents whose reprehensible behaviour cries out for proper regulation. The urgency for regulating the sector has now increased, following the passage of the Building Safety Act 2023. This legislation has meant managing agents of blocks of flats taking responsibility for spending substantial sums of leaseholders’ money and of taxpayers’ subsidies to cover remedial building works in blocks of flats. It is now more essential than ever that such responsibilities are exercised only by reputable and qualified professional agents.
There is rock-solid support for a regulator of property agents from the professional bodies and trade associations representing the sector: the RICS; Propertymark; and the Property Institute, which comprises the Institute of Residential Property Management and the Association of Residential Managing Agents. Those property agents who are acting honourably are undermined by the unprofessional conduct of too many. Of course, the organisations representing consumers, such as Citizens
Advice and the Leasehold Knowledge Partnership, are extremely supportive of the proposals encapsulated in this amendment.
A regulator would establish requirements for relevant qualifications and continuous professional development and would require adherence to an overarching code of conduct and to subsidiary-specific codes covering the different components of property agency. The regulator would have a full range of enforcement powers, from requiring specific changes to levying fines or removing the licence for a firm or individual to operate. That would provide the same consumer protections as for social housing, with its social housing regulator and Housing Ombudsman, and as for the financial sector, with its Financial Conduct Authority and Financial Ombudsman Service.
As with accountants, lawyers or surveyors, property agents deserve to be respected as professionals with expertise and with the proper attributes that go with professional status. Why would the Government resist a measure that is likely to be extremely popular with millions of leaseholders, which is earnestly requested by those who would themselves be the subject of regulation, and which has been given so much support from this House, particularly following the strong encouragement from the cross-party scrutiny of your Lordships’ own Industry and Regulators Committee last month?
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At Second Reading, I provided the—I hope—compelling reasons why there should be no worries about the cost of a regulator or concerns that an ombudsman service could save the need for a regulator. I think that the real reason that the Government are holding back is the fear that there is simply too much work to be done to establish an all-singing, all-dancing regulator of leasehold property agents, so I will reassure Ministers that much progress has already been made in lining up the key components of a regulatory scheme.
First, on a code of practice, existing representatives of the sector have brought together a draft code, led by the noble Baroness, Lady Hayter of Kentish Town, who has been an invaluable supporter of this agenda. That code is ready and waiting for the regulator to accept or amend. Secondly, on the levels and contents of qualifications for managing agents, the Department for Levelling Up, Housing and Communities is active already in devising similar arrangements for those managing properties in the social rented sector, following the Social Housing (Regulation) Act 2023, and the department’s work will do much of the job for leasehold managing agents too.
Thirdly, to provide the necessary training for qualifications, there are already excellent courses on offer in a competitive market where training providers stand ready to expand. Fourthly, at the enforcement level, local trading standards officers already have responsibilities for inspecting and checking on property agents; for example, to see whether they comply with the duty to hold client money protection insurance and professional indemnity insurance. With funding from the regulator, trading standards could expand its existing role.
Finally, on covering the tasks that a new regulator must tackle, there is the option of delegating some administrative or other functions to designated
professional bodies, such as the RICS, already operating for a segment of this sector. So we are ready to go. That just leaves the response that there is simply no time to amend the Bill if it is to pass before the forthcoming general election. The issue has been debated repeatedly over the last five years, and the commitment to professionalise the sector has been reiterated in successive manifestos. Have we now run out of time, or can the Minister report some success, not for the first time, in convincing her departmental colleagues to do the right thing? An independent statutory regulator for leasehold property agents would go an appreciable distance to tackling at least some of the extensive problems of the leasehold sector, and would earn the blessing of so many leaseholders who desperately need a powerful consumer ally. I beg to move.