4 in 5 Landlords Support Compulsory Client Money Protection

Landlords are showing support for the introduction of mandatory client money protection, a recent survey suggests. The survey, conducted by Total Landlord Insurance, consulted 387 landlords to gather their opinions on the Government’s plan to introduce mandatory client money protection under the Housing and Planning Act 2016. This survey data has been provided to the Government to help inform their decision.

The survey indicated that of the 85% of landlords that use a letting agent, 81% believe client money protection should be made compulsory.

It is currently estimated that £2.7bn in client funds is held by UK letting agents. A compulsory client money protection law could mean landlord and tenants' money would be secured against loss should the letting agent not be able to provide the money due to theft, misappropriation or business failure. Whilst few of these losses result from deliberate criminal activity, ensuring safeguards are in place for clients to recuperate their losses will help raise standards throughout the private rented sector. 

Our Head of Redress, Sean Hooker, supports this potential raise in standards: “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.” 

Letting agents may automatically receive client money protection from trade association membership such as UKALA, ARLA, NALS or RICS. However, becoming part of such associations is often quite difficult for smaller agents. Our partner scheme, Client Money Protect (CMP), offers a standalone scheme they can join to protect their clients. To read more about CMP, please click here.