Head of Redress report 2020

No report for 2020 can ignore the events that unfolded throughout last year. The current pandemic has been an unprecedented period in our country’s history and everyone has faced hardship and sacrifice in their daily lives, with many facing an uncertain future without security and in fear.

Whilst every sector is experiencing challenges, the property sector is one that is particularly crucial to the economy, health and wellbeing of every person in the country.

Lockdown hit everyone hard, and whilst the headlines were rightly focused on the medical response to the virus, the impact on the housing market was a major concern. It was reassuring therefore that the industry was one of the first to have lockdown eased and so many agents were able to resume service and return to work, albeit in a very controlled way.

What happened in 2020?

Sales

Sales boomed but will it lead to more complaints?

The economic stimulus that the Stamp Duty (SDLT) reductions brought, meant the buying and selling market has bounced back relatively quickly. Of course, this may not last and has certainly brought other challenges such as pressure on transaction speed, with all parts of the buying and selling chain put under pressure from the restrictions put in place due to lockdown. Whilst the statistics in terms of complaints for last year do not reflect it for 2020, there will be an increase in complaints against estate agents for this current year relating directly to the effect of what has happened.

Personally, I think there may be a post STLD holiday hangover when this ends as sellers have rushed to complete and buyers perceive that the bargains are no longer there to be had. However, this will be short lived and could still be smoothed if the end of the relief is tapered.

We will see a temporary fall in transactions as both buyers and sellers stay put and this could mean the figures being skewed as some of the remaining properties are sold at discount by those committed to move. This will however only affect certain parts of the market but these are likely to bounce back quickly.

There will also be a drop in confidence when employment uncertainty creeps in following the end of furlough, however vacancies in some sectors are at record highs and the picture will again be patchy. All depends on the structural influences in the economy so we shall wait and see!

Lettings

Lettings faces a challenging future

Whilst every sector faces challenges, the private rented sector is one that is particularly vulnerable at the moment.

The number of people that rely on privately renting is around 23% of the population, and this is not just single people, and students, but hardworking families up and down the country. The effects of the pandemic have left a significant number of them struggling with rent arrears and whilst there was effectively a moratorium on evictions for most of last year, the repercussions of this will last for a long time to come.

The housing stock is provided by around two million private landlords, many of whom only own one or two properties, often relying on their investment and rent income to provide for their pension provision and balancing being a landlord with a full-time job and their own family commitments. These ordinary people have faced the same challenges as everyone else with some being on furlough and themselves losing their jobs or facing redundancy. The mortgage deferral scheme has helped but inevitably this debt will have to be repaid.

This is why during lockdown we at the Property Redress Scheme launched our brand-new Tenancy Mediation Service to help resolve issues between landlords and tenants.

The pressures on both landlords and tenants will inevitably be transferred to their agents and again this will result in increased complaints and more referrals to us.

RLM

RLM – reform or revolution on the horizon

2020 was a double whammy for property managers in both having to deal with the challenges of lockdown, but also keeping up to speed with all the changes in the pipeline in regards to fire and building safety.

The cladding issue still looms large and there will be a period of uncertainty and challenge for the sector as this saga plays out.

This is the era of transparency and consumer protection and the onus on providing accurate and reliable information to leaseholders by agents will become a focal point of their ongoing relationships. The implications of the changes will not just affect RLMs but also estate agents selling leasehold properties and letting agents renting them out. The responsibility of all property agents to disclose material information is set to go up a level and we are already seeing the impact of this on complaints.

What does 2021 hold?

The times they are a changing – again!

Later this year, we will see the biggest shake up in the sector for thirty years, with the Renters Reform Bill starting its passage through Parliament. It will mean substantial changes including the fundamental reform of the possession and court system, reform of deposits, landlord redress and registration. In addition, the regulation of property agents has a real chance of becoming a reality, with qualifications, training, codes and accountability. This change will not come in overnight, but agents should be preparing now and ensuring they are as compliant and professional as they can be.

How are we adapting?

Overall, we at the Property Redress Scheme weathered 2020 very well. As you will see in the report, membership grew but so did complaints and exponentially so. However, our time taken to resolve complaints fell and this was as a result of our success at early resolution. We have also found that our agent members have been very responsive and proactive in working with us and this reflects that the sector has embraced the importance of redress.

Of course, we have had to navigate the challenges of homeworking and remote communication and this will be an evolving environment for a while to come.

In terms of the scheme, we have made modest increases to our fees, but given these are still very close to what they were almost seven years ago, this is a sustainable position.

Lettings helpline

HF Assist logoWe have decided not to continue with the legal helpline for enhanced members, following consultation with members and feedback on the value and usage of the service.

However, we have decided to team up with a brand-new sister company, which we set up in lockdown, called HF Assist, which is a comprehensive letting agent helpline that gives specific advice on letting issues from letting professionals, not lawyers, and their services are being offered to our agents as a discounted optional service.

Engagement

I continue to engage with the sector and government to ensure that I can share the experiences and lessons, real agents are going through everyday and hopefully this will help ensure that the changes in the future work for all parts of the industry. We have engaged with our membership in the form of newsletters, blogs and updates, as well as engaging with the media and other channels of communication.

Member survey

In 2020 we conducted a survey of all our members on their experiences when the sector reopened and returned to work and we also decided to make our annual report, interactive and online.

We want the scheme to be responsive and open to our members and work with them to improve and enhance their business which will mean positive effects on their consumers in terms of the service they provide, the professionalism they show and the trust they engender.

Thank you to all my team, including my advisory council and also all the members who have joined us. This has not been an easy period, however the sector is strong and will continue to grow and prosper.

Sean Hooker, Head of Redress, Property Redress Scheme