Housing Secretary vows to regulate letting agents and clamp down on fees

Housing Secretary vows to regulate letting agents and clamp down on fees

Housing Secretary Angela Rayner announced plans to introduce independent regulation of letting agents, requiring licences and qualifications, and to cap fees charged by landlords and managing agents on leasehold and freehold estates.

Housing Secretary Angela Rayner made a forceful statement at the Labour Party conference condemning “unqualified, unlicensed and unregulated agents” who she said have taken “thousands” from customers without transparency or accountability. Rayner, who was paid £20,000 for a two-hour contribution to a summer event organised by the agents’ trade body Propertymark, declared that the government will legislate for independent regulation to rein in these “cowboys”. She said those agents will be required to follow rules, and licences will be revoked if standards are not met.

This announcement follows a statement from the Ministry of Housing, Communities and Local Government (MHCLG) confirming its intention to introduce an independent regulator for property agents. The regulator will be empowered to set codes of practice, including standards of conduct and proper complaint handling. Agents will need to obtain licences and appropriate qualifications to operate, with the regulator able to revoke licences for non-compliance. The government emphasised that these measures aim to “fundamentally rewire homeownership” and support over five million leaseholders and future homeowners with stronger protections.

Details of proposed regulation and fee caps

The MHCLG also announced ongoing leasehold reforms targeting fees charged by landlords and managing agents. Under the current system, leaseholders and residents on freehold estates can be charged fees for simple permissions, such as keeping a pet, with no certainty on costs or oversight. The government plans to legislate to give the Secretary of State the power to cap these fees at genuinely reasonable levels that landlords must follow.

These new powers will also apply to privately managed estates where homeowners face fees for minor cosmetic changes to their properties. The reforms will clamp down on administrative fees, including charges for providing documents like building safety certificates or notifying landlords of mortgage provider changes. A public consultation will be launched to determine the scope and amounts of these caps.

Context of regulation in the private rented sector

The private rented sector has long faced criticism for inconsistent standards among letting agents and landlords, with calls for tighter regulation to protect tenants and responsible landlords. The proposed independent regulator would address concerns about rogue agents who operate without accountability, mishandle client money, or fail to meet professional standards. Licensing and qualification requirements aim to professionalise the sector, improving transparency and consumer confidence.

Leasehold and estate management fees have also been contentious, with many leaseholders reporting unexpected or excessive charges. The government’s move to cap fees and increase oversight seeks to bring fairness and predictability to these costs, which often affect leaseholders’ ability to manage their homes effectively.

Practical implications for landlords and letting agents

For landlords and letting agents, the introduction of mandatory licensing and qualifications will require compliance with new regulatory standards. Agents currently operating without regulation will need to apply for licences and meet qualification criteria to continue trading legally. This is likely to increase operational costs and administrative responsibilities but should enhance professionalism and reduce unfair practices.

Landlords managing leasehold or freehold estates should prepare for forthcoming limits on permission and administrative fees, which may reduce income from these charges but could also reduce disputes with tenants and leaseholders. Agents and landlords will need to monitor the public consultation closely to understand the scope and scale of fee caps and adjust their practices accordingly.

Uncertainties and what to watch next

While the government has committed to introducing these regulatory changes “as soon as possible,” exact timelines and detailed regulations remain unclear. The scope of the independent regulator’s powers, the qualification requirements for agents, and the specific fee caps to be imposed will be clarified through forthcoming legislation and consultations.

Landlords and agents should watch for official guidance from the MHCLG and the regulator once established. The impact on existing contracts, ongoing disputes, and transitional arrangements for unlicensed agents will also be important to track. It remains to be seen how enforcement will be managed and how the regulator will interact with existing bodies such as Propertymark.

What landlords should consider now

Landlords should review their relationships with letting agents to ensure they are regulated or preparing to comply with new licensing requirements. Checking agents’ qualifications and licences will become increasingly important to avoid risks associated with unregulated providers.

Those managing leasehold or freehold estates should start assessing current permission and administrative fees charged to residents and consider how potential fee caps might affect their income and management practices. Preparing for increased transparency and accountability in fee structures will be essential.

Landlords and agents should stay informed about the government’s consultations and legislative developments, seeking professional advice where necessary. Maintaining thorough records of fees, permissions, and communications with tenants and leaseholders will support compliance and dispute resolution under the new regime.

Supporting landlords through regulatory changes with TLA

The Landlord Association (TLA) offers members access to up-to-date compliance resources and practical guidance on regulatory changes affecting letting agents and landlords. Through TLA’s developing ORBIT platform, currently in BETA testing, landlords and agents can organise property portfolios, manage rental documentation, and record key actions related to licensing and fee management.

ORBIT’s tools for tracking communications, permissions, and administrative fees can help landlords prepare for the new fee caps and regulation of agents. TLA membership also provides access to expert insights and updates on government consultations, enabling members to anticipate changes and adjust their practices accordingly.

Exploring TLA membership and ORBIT BETA access can support landlords and agents in maintaining compliance and managing their portfolios effectively amid evolving regulatory requirements.

Looking ahead, landlords and letting agents should prioritise engagement with the forthcoming regulatory framework to ensure they meet new standards and protect their interests as the sector undergoes significant reform.

Sources: Landlord Today