Ministers have ruled out the prospect of regulation for letting agents.In a letter to the Association of Residential Letting Agents (ARLA), the government has made clear that no action is on the way against rogue agents who rip off landlords and tenants.

ARLA has pushed for tighter rules to protect rents and deposits paid to agents, but the government refuses to back their call.

Instead, ministers feel the letting industry effectively self-regulates and points out that this is with only a third to half of letting agents belong to an industry regulated group.

The plea for regulation came from ARLA in a letter to housing minister Grant Shapps.

ARLA highlighted some recent high-profile cases where landlords and tenants had lost money due to fraud or poor business practices.

In a letter to ARLA, the Communities and Local Government Department said: “The lettings industry is not subject to statutory regulation; however, it is in the interests of the industry to maintain consumer confidence and we look to organisations such as the National Federation of Property Professionals, of which ARLA is a part, to take a lead in that work.

“The department continues to explore how best to counter poor practice by letting and managing agents without resorting to regulation.

“Between a third and a half of agents belong to voluntary schemes which ensure that members have the right protections for consumers in place.

“In view of the well developed voluntary regulation in the sector, ministers do not believe regulation is the answer at present. They are keeping a watching brief, and information about poor practice is always useful in that context.”

ARLA commented that the reply was not unexpected.

ARLA’s call for industry regulation comes as rival letting agents have set up SafeAgent, a scheme to safeguard landlord and tenants funds collected by letting agents.