The head of nationwide lettings franchise Martin & Co has expressed pessimism about the prospect of new letting reforms announced by the government at the beginning of April.
Ian Wilson, who is CEO of The Property Franchise Group which owns Martin & Co, said the governmental reforms are “welcome and well-meaning”, but “will probably be clumsily executed.”
Legislation that will increase the burden of work and cost on agencies has already led to at least three businesses going up for sale.
Changes to regulations include the introduction of compulsory training, a code of conduct, another regulator, and a change to leaseholds. It has meant that three Martin & Co franchisees have bought independents in Cheshire, Lincolnshire and East Sussex.
“We have a well-oiled machine and access to cash”, said Wilson. “When sellers want to move quickly, we can do it.
“It’s going to be a lot of work to stay in the lettings game.”
In a piece written for Property Industry Eye, Wilson said it’s “obvious that regulation of the lettings industry is overdue”. But he worries that there is no “obvious competent” regulator that could reasonably be chosen to handle the property market.
He is scathing about ARLA and NALS, “which on closer examination are not compliant with client accounting best practice.
“The problem is that they rely on self-certification from accountants who sign off membership paperwork and some of whom either don’t know or don’t care if client funds are intact.
“[A] thorough clean-up could have very far-reaching implications for a big group of average agents”, leading them to leave the industry in the same way that two-thirds of financial advisors gave up following regulation of financial services.”
With regulation that has been described as “clumsy”, the worry is that more governmental regulation will simply lead to a mass exodus.
Ed Mead, co-founder of Viewer, offered Agent Wow his thoughts on the new letting reforms.
“Clear outs usually occur after a crash, 08/09 saw tens of thousands leave the industry. It is a great career but no coincidence that the cheapest place to sell/let property in developed world is also the place with the lowest barriers to entry.
“Boots on the ground still count and is why access via the gig economy to extra staff, as with Viewber, is potentially one answer,” Ed Mead commented.