Consultation on a draft statutory code of practice and training requirements for letting agents in Scotland: analysis of consultation responses

1. Introduction

About this report

1.1 This report provides an analysis of written responses to the Scottish Government consultation on a draft statutory code of practice and training requirements for letting agents in Scotland.

Background

1.2 Scotland's private rented sector has grown substantially in recent years. Between 2001 and 2013, the sector almost doubled to 290,000 households (12%)^[1]. This increase has continued: recent statistics demonstrate that there has continued to be an increase in the number of households renting privately or living rent free, increasing from ten percent in 2004 to fifteen percent by 2014^[2]. This trend seems set to continue, partly due to rising house prices, the economic downturn and the challenges of securing mortgages.

1.3 Letting agents have a significant role to play in the private rented sector. Although there are voluntary schemes promoting best practice, for example through ARLA (the Association of Residential Letting Agents) and Landlord Accreditation Scotland, currently there is no statutory regulation of letting agents in Scotland. Anyone can operate as a letting agent, regardless of qualifications or experience. This can result in variable service levels for both tenants and landlords, including general bad practice, lack of financial protection and no effective way to resolve complaints against letting agents.

1.4 Key stakeholders across the property industry, such as ARLA, Chartered Institute of Housing (CIH) Scotland, Council of Letting Agents, Letscotland, the Property Ombudsman, the Royal Institution of Chartered Surveyors (RICS), Scottish Association of Landlords (SAL), Scottish Land and Estates and Shelter Scotland, have highlighted the need to regulate letting agents to better protect tenants and landlords and to create a fairer and more consistent system.

1.5 The Housing (Scotland) Act 2014 introduced a framework for the regulation of letting agents in Scotland, and the foundation for a mandatory letting agent register. The Act provides for a statutory Letting Agent Code of Practice to be adhered to by all letting agents, and a training requirement that must be met to ensure acceptance onto the mandatory register of letting agents. Successful registration indicates that an applicant is 'a fit and proper person' to carry out letting agency work. It will be a criminal offence for any letting agent who is not on the register to operate.

1.6 The Act also introduces a new route of redress for tenants and landlords to the First-tier Tribunal (FTT). This will enable tenants and landlords to resolve complaints against letting agents, for breaching the new statutory code of practice. Through these measures, the Scottish Government wants to ensure a private rented sector that provides good quality housing and high management standards.

1.7 The Scottish Government therefore undertook a consultation (between 24 August and 15 November 2015) to gather stakeholder views on the draft Letting Agent Code of Practice and proposed training requirement for letting agents. This included proposals around standards of practice; handling tenants' and landlords' money; professional indemnity arrangements; and training requirements and qualifications.

Analysis methodology

1.8 The Scottish Government received and organised all consultation responses - either through the online consultation platform, by email or post. All responses were transferred securely to us (Research Scotland) for analysis.

1.9 We ensured that all responses were input into the online consultation platform, and downloaded these to Excel - in order to analyse quantitative (yes/no/don't know) responses and qualitative (open-ended) responses. A small number of non-standard responses were received, which did not follow the consultation structure. These responses were carefully read and comments, whether quantitative and/ or qualitative, were input against the relevant consultation questions.

1.10 We agreed respondent categories with the Scottish Government, so that we could analyse trends and differences between different types of respondent.

1.11 We undertook quantitative analysis using Excel in order to produce a table for each quantitative question, highlighting overall responses and a breakdown by respondent category.

1.12 We analysed qualitative responses using a process of manual thematic coding. This involves reviewing the open responses and manually coding the themes identified by each respondent. The qualitative analysis process pulled out the main themes from each question which allowed the range of views to be presented across all responses and trends among respondent groups to be highlighted.

1.13 In the course of our qualitative analysis, it became clear that there was often a fine line between respondents who said that they agreed with a particular proposal, and those who said they disagreed. For example, a respondent might have said that they were content with the basis of a particular proposal, but said that they disagreed with it for a specific reason. Where relevant, we have sought to highlight this within the report.

1.14 A number of respondents made very specific comments, which were important but technical in nature. We have included a list of these detailed points as Annex One.