The investigation, conducted by Total Landlord Insurance, asked organisations to provide a response on whether they think CMP should be made mandatory in 2016. Of 85% of landlords who use a letting agent, 81% think it should be made compulsory.
Risk
Recent data released by YouGov revealed that hundreds of thousands of pounds of landlord and tenants’ cash are at risk, as they are not protected by CMP.
At present, letting agents in the UK currently hold more than £2.7bn of landlord and tenants’ money in the form of rent and tenancy deposits. However, it is believed that around one in five tenants will not be able to recover funds should their agent steal them, or uses it for fraudulent purposes.
YOUR AGENT director Rob Lock says we think ‘Client money protection, like redress scheme membership, should be compulsory for letting agents. This change would give the consumer added protection and ultimately raise standards throughout the industry.’
Group
The Government has moved to establish a working group with colleagues from the House of Lords to assess if CMP schemes should be made mandatory. This is being led by Liberal Democrat Peer Lord Palmer and Labour’s Baroness Hayter.
These schemes, which hold cash independently, are voluntary, with the Government estimating that only 60-80% of agents use them.
Sean Hooker, head of redress at the Property Redress Scheme, said: ‘With an increasingly growing rental sector and the money involved, the risk of serious economic damage that could easily occur without adequate safeguards, is something we cannot be complacent about.’
‘These figures clearly show that landlords see this protection as essential to ensure they deal with safe and professional agents that they and their tenants can trust,’ he added.
YOUR AGENT support mandatory Money Protection for letting agents in the wake of the launch of a government consultation on the subject.
"CMP is an entirely sensible measure that protects both the landlord and tenant in the unlikely event that an agent goes into administration or misappropriates a client’s funds" says YOUR AGENT director Rob Lock.
"Calls have been made for the launch of this review for some time so we are very pleased that it has now been announced. It provides an extra, but essential, degree of security for professionals in the industry as letting agents currently hold approximately £2.7 billion in client funds. It’s really important for members, and the wider industry, to come together as one clear, loud voice to call for full, mandatory CMP through this consultation."
The government launched a six week consultation period with an open letter from housing minister Gavin Barwell saying letting agents currently hold approximately £2.7 billion in client funds “but if a letting agent is not covered by client money protection, both the landlord and tenant could stand to lose their money.”
It goes on to say that currently between 60 and 80 per cent of letting agents voluntarily pay a membership fee of £300 to £500 to join a client money protection scheme and this forms part of a central pot of money that can then be used to pay successful claims by landlords and tenants.
YOUR AGENT are member of Client Money Protect (CMP) make sure your agent is protecting your money the way that we protect our clients money.
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