NAEA continues the campaign for Client Money Protection

Friday 18 December 2015

On the final day of debate in Parliament, in which the Public Bill Committee looked at the Government’s Housing and Planning Bill 2015, ARLA’s proposed amendment to make membership of a Client Money Protection scheme compulsory for all letting agents was rejected.

The amendment was supported by Mark Hayward and NAEA because the Association is keen to ensure that consumers are protected across all aspects of the housing market. The NAEA also believe that the introduction of a protection system for tenants monies would ensure that a small, but potentially devastating, loophole in the protection of the consumer is eradicated.     

In the Public Bill Committee, Teresa Pearce MP proposed the amendment and referred to industry support for the change. She mentioned ARLA’s view that client money protection is fundamental for tenants and landlords to ensure that they have peace of mind should an agent go bust or take with their funds. 

At the Committee meeting Brandon Lewis, the Minister of State for Housing and Planning, said he was aware of support for the new clause but was concerned that requiring letting agents to belong to a client money protection scheme could introduce significant costs and implications for the sector.     

The Minister added that introducing a mandatory client money protection scheme would be a step too far and would overburden the market. Mr Lewis thinks that the fee transparency measures contained within the Consumer Rights Act 2015, coupled with existing consumer protection rights mean that the balance of regulation for letting agents is currently about right and therefore a change is not needed at this time.

However, the Minister did say that he recognises the importance of Client Money Protection and in May 2016 he will review the impact of the transparency measures that were recently introduced.

You can view the transcript from the Committee here.

The NAEA is disappointed that the amendment was withdrawn, but will continue to support the campaign to bring about the change. We hope that next year’s review into the impact of the transparency measures will conclude that mandatory Client Money Protection is needed.   

The petition to ensure MPs fully understand the importance of this issue is still live so please  sign it in order to keep the pressure on and force the change which will provide greater protection for tenants and landlords if things go wrong.

To show your support for the campaign and to help protect tenants and landlords please visit the Parliament Petitions site to sign the petition and share the link today!