18
Feb
Estate agents are likely to get the all-clear
The UK estate agent sector is likely to get a clean bill of
health when a key report into people's experiences of buying a home
is published later.
The Office of Fair Trading has been studying internet property
sites, price competition between agents and consumer protection for
the last 12 months.
Buyers argued that some agents' descriptions of properties were
misleading and that some failed to pass on offers to sellers.
It prompted new legislation, including a requirement that all
estate agents must be a member of a free ombudsman service that
deals with any customer complaints and can order compensation.
More controversial has been the introduction of Home Information
Packs in England and Wales, or Home Reports in Scotland.
The latest market study - due to be published at midday - is
considering whether competition has improved since 2004, and
whether consumers are adequately covered by the new rules.
It will draw on research, published by the OFT in November,
which found that 24% of estate agents visited by trading standards
officers failed to comply with regulations in the industry.
However, research published at the same time found that buyers'
and sellers' satisfaction levels with estate agents had improved
from 2004. It found 72% of buyers and 74% of sellers were happy
with the service in 2004, but this had risen to 88% by 2009.
The Property Ombudsman has found that sales complaints have
dropped away in 2009 owing to the state of the market.
The bigger gripe for these people was with the individual buyer
or seller on the other side of the transaction, or their
solicitor.
Changing picture
The housing market has seen major changes since 2004, not least
with house prices.
A recent survey suggested satisfaction with estate agents had
improved.
But there have been calls for more regulation, as anyone can set
up in business as an estate agent.
Market research estimated that the UK estate agency market was
worth £6.7bn in 2007 from approximately 1.8 million
transactions, although the subsequent house price slump has
probably reduced this figure.
Satisfaction
In 2004, a similar study by the OFT into the housing market - but
only in England and Wales - found that there was widespread
dissatisfaction with estate agents.
Prices rose sharply until the credit crunch led property values
to plunge throughout 2008 before recovering to some extent at the
end of 2009.
Estate agents were hit hard by the downturn, at a time when the
methods of buying and selling homes were changing.
An increasing number of people have considered selling
privately, selling at an auction, and - most significantly - using
an online estate agent.
The latest year-long review has looked at how easy it has been
for new internet-based agents to gain a foothold in the market.
Regulation
At the moment anyone can open up an estate agency without any
qualifications or permission from any official body.
They can, though, be banned by the OFT if they subsequently
break the laws about describing a property incorrectly, handling a
client's money, not declaring an interest in a property, or engage
in some other form of dishonesty.
In a report published in June 2008, the former head of the OFT,
Sir Bryan Carsberg, called for more regulation of the industry, and
for Home Information Packs to become voluntary.
However, the cost of greater regulation in an industry under
pressure from a moribund market could be fought against by
agents.
The OFT report will offer various recommendations that might
require new legislation if they are not automatically adopted by
the industry.
The study has also looked at the question of fees for services
provided to buyers such as referrals for mortgages, surveys, legal
advice and other services.
It has considered whether agents are open about these fees to
customers, whether people are at risk of being overcharged, and
whether these customers shop around or negotiate on charges for
these services.
Mark Mclaren, of the consumers' association Which?, said: "We
have long thought that the industry works more in the interest of
property professionals and the consumer is forgotten about."
source: www.bbc.co.uk/news Thursday 18th
February 2010