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Landlords overwhelmingly support compulsory client money protection

Four out of five buy-to-let landlords believe that client money protection (CMP) should be made compulsory when they use a letting agent to rent a property out, new research has revealed.

The survey, conducted by Total Landlord Insurance to assist with a recent government consultation asking organisations to provide a response indicating whether they believe CMP should be made mandatory through the Housing and Planning Act 2016, found that of the 85% of landlords that use a letting agent, 81% believe CMP should be made compulsory.

Recent research from YouGov, undertaken for SAFEagent, revealed that hundreds of thousands of pounds of landlord and tenants’ money held by letting agents are at risk because the funds are not protected by CMP.


Letting agents in the UK currently hold more than £2.7bn of landlord and tenants’ money in the form of rent and tenancy deposits, but it is believed that around one in five landlords and tenants will not be able to recover their funds if an agent steals the cash or uses it fraudulently because their money is not protected under the CMP scheme.

“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,” said Steve Barnes, associate director at Hamilton Fraser.

The government officially launched a review over the summer into whether private landlord and tenants’ money is properly protected from letting agents committing fraud or declaring bankruptcy. 

The government has established a working group with colleagues from the House of Lords, led by Liberal Democrat Peer Lord Palmer of Childs Hill and Labour’s Baroness Hayter, to look at how CMP is currently operating and whether CMP schemes should be made mandatory.

Currently the schemes, which would hold such cash independently, are voluntary and the government estimates only 60-80% of letting agents use them.

Sean Hooker, head of redress at the Property Redress Scheme, said: “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.”

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