4 in 5 letting landlords say they believe client money protection (CMP) should become a mandatory requirement for all agents.
A recent survey conducted by Total Landlord Insurance has revealed that, of the 85% of landlords that use a letting agent, 81% believe client money protection should be made compulsory.
This comes as the Government conducts an industry-wide consultation to decide whether client money protection will become mandatory.
“Client money protection, like redress scheme membership, should be compulsory for this sector. This change would give the consumer added protection and ultimately raise standards throughout the industry,” says Steve Barnes, Associate Director, Hamilton Fraser
The survey was conducted to assist with a recent government consultation asking organisations to provide a response indicating whether they believe client money protection should be made mandatory through the Housing and Planning Act 2016.
CMP schemes are used by letting agents for the benefit of their clients, typically tenants and landlords, in order to safeguard money they hold on their clients’ behalf. In the event that the agents lose any of this money, for example due to theft, misappropriation or their business going into administration, the scheme will recompense the landlord or tenant and seek recovery from the letting agent.
With survey respondents owning on average three properties, industry estimates suggest UK letting agents hold approximately £2.7 billion in client funds. Without client money protection, this money could be at great risk should letting agents lose the money.
“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,” says Sean Hooker, Head of Redress, Property Redress Scheme
This release is based on a survey of 387 respondents, all of which are landlords that are, or have been, customers of Total Landlord Insurance.
As Hamilton Fraser trade in this industry, the Government have requested information from them, and similar companies, regarding customers’ current opinions towards compulsory client money protection. To assist the Government in this consultation, the HF survey was been conducted to gather opinions from their customers to help inform their decision.
Hamilton Fraser say Landlords support CMP https://t.co/XnOxS1zjt4
— LandlordZONE (@LandlordZONE) November 1, 2016