The UK property market is on the brink of a major shake-up. The Regulation of Property Agents (RoPA) is poised to restructure the industry for managing agents, bringing with it new rules, higher standards, and increased accountability. While the exact implementation date remains uncertain, the writing is on the wall: change is coming.
Understanding RoPA, whether it is seen as a challenge or an opportunity, is crucial for anyone involved in property management.
What is RoPA?
The Regulation of Property Agents (RoPA) is a government-led initiative which states that "property agents should be regulated by an independent regulator, with mandatory qualifications and a code of practice". The regulations are aimed at estate agents in the UK and managing agents in England.
Currently, letting agents in the UK have no statutory regulations to comply with. However, they are part of redress schemes, which means tenants and landlords can file complaints to local councils.
When will RoPA be introduced?
Labour Housing Minister Matthew Pennycook renewed the Government's commitment to the RoPA in October 2024.
An inquiry in February 2024 hosted by Baroness Taylor emphasised the need for quick action. The inquiry addressed:
- Whether a new regulator of property agents should be introduced.
- Whether the current redress schemes are working effectively.
- Whether the regulator should cover landlords and freeholders, as well as property agents.
However, there is currently no confirmed date for the introduction of RoPA into law.
How RoPA could impact managing agents
Increased responsibility
Managing agents must become even more diligent in ensuring landlords comply with the new regulations. RoPA stands to bring in a plethora of changes for managing agents and so they must be prepared.
There would be a minimum standard to operate
Managing agents don't currently need any normal qualifications to do their jobs, but 75% of respondents to a Government Call for Evidence report supported the introduction of stricter standards.
Pennycook has previously proposed requiring managing agents to have at least one A-level to enter the industry. Senior managers would be required to hold at least a Level 4 qualification, which is the equivalent of a university degree. This would supposedly mean that agents would be more likely able to handle complex regulations than if they didn’t have a certain level of knowledge and understanding. However, it is argued that while some may lack formal qualifications, they make up for this with years of experience.
Mandatory licensing
A new regulatory body would license all property agents in the private rented sector. As a result, managing agents should expect to face stricter licensing compliance. This would mean a significant investment in training, especially. Agencies would have to ensure that their staff meets the qualification criteria to maintain their licences.
New code of practice and raising of professional standards
A strict code of practice would be enforced, which would detail the standards expected from agents, including professionalism, conduct, and client care. This would mean tenants are protected from poor service and unscrupulous practices, and raised standards would be encouraged among managing agents.
Increased financial considerations
New standards mean new costs. Unsurprisingly, additional training, obtaining licences, and adapting business procedures would be more costly. This may be no skin off the back of larger agencies, but for smaller ones, it may pose challenges.
Final thoughts
RoPA represents an oncoming shift in the landscape of property management in the UK. While it may seem daunting, proactively preparing for these changes by keeping informed can only be useful for managing agents.
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