Industry reacts to plans to improve standards in the estate agency market

Housing Secretary Sajid Javid has announced the government will introduce new measures to professionalise the estate agency market to drive up standards and put a stop to rogue landlords.

Related topics:  Property
Warren Lewis
9th April 2018
Gov 99

Estate agents will now be required to have a professional qualification as well as operate with more transparency where fees are concerned particularly with regard to referrals from solicitors, mortgage brokers and surveyors.

Other measures to be announced are: -

• Encouraging the use of voluntary reservation agreements to help prevent sales falling through and crack down on gazumping.
• Setting a timeline for local authority searches so buyers get the information they need within 10 days
• Requiring managing agents and freeholders to provide up-to-date lease information for a set fee and to an agreed timetable which will end the current situation where leaseholders are at the mercy of freeholders and their agents; and
• Strengthening the National Trading Standards Estate Agency Team so they can carry out more enforcement activity which includes banning agents.

Russell Quirk, founder and CEO of Emoov.co.uk, had this to say: "For far too long the estate agency industry has got away with providing below par standards to the determent of those it is supposed to support and serve. Hopefully, these new regulations will go some way in raising the bar and compelling those operating below it to get their house in order.

The current process is outdated and works in favour of the agent not the consumer and this simply isn't good enough when you consider the financial commitment required throughout the process.

Home buying and selling must be improved and by increasing the speed of a transaction, with the addition of a higher degree of certainty and stability, fewer sales will collapse, less money will be wasted and there will be less stress for buyer and seller alike.

We've been working with the Land Registry, Nationwide and the Law Society to name but a few, as part of the Ministry of Housing Culture and Local Government, to provide guidance and advice on how to better the UK home buying and selling process. One area we’ve highlighted that is in dire need of improvement is the lack of regulations and qualificational requirements and so we are vehemently in favour of licensing agents and delighted to see this change in the industry."

Mark Hayward, Chief Executive, NAEA Propertymark, comments: “We have been campaigning for a more professional estate agent market for years, and are really pleased the Government is committing to this. For too long, unprofessional agents with no qualifications have been able to operate in the sector, and advise homeowners as they undertake the most important purchases and sales of their lives.

Our research has found that the process of buying a home is more stressful than starting a new job, undertaking home renovations or planning a wedding, so it’s important that agents are well-informed and professional, to make the process as easy and stress-free as possible. Enforcing compulsory qualifications will result in a fairer industry not only for consumers, but for the professional agents who have undertaken qualifications in order to deliver the highest standards every day.”

Christian Warman, director of central London estate agency Tedworth Property, says: "Professional qualifications are likely to mean passing a test or exam of the standards we, and most other agents, currently adhere to as set out by the NAEA and property ombudsman.

Voluntary deposits to prevent gazzumping are always a source of debate - they are sometimes used nowadays but often an inordinate amount of time can be spent determining the terms of the initial deposit so it would be good to have this standardised.

People often associate gazumping with a seller’s market - however, it also happens in a buyer’s market as we experienced last week. We agreed a sale at a price more favourable to the buyer than the seller but the former took his time providing solicitor’s details, getting his survey booked in, and providing details of his mortgage broker. Lo and behold, another buyer who had seen the flat beforehand submitted an offer at a higher amount as he had the confidence that someone else wanted to buy the property, making it more desirable in his eyes - two offers in 10 days on a property that had been on the market for almost a year. Ultimately, the first buyer should have taken note of the phrase: if you snooze you lose.

If he had provided the necessary information he had been repeatedly asked for in a timely fashion, rather than taking over a week to provide the most basic details, he would not have been gazumped and we wouldn’t have been subjected to the volley of verbal abuse.

Openness about referral fees should already be adhered to, in order to prevent any conflict of interest.

People often associate sales fall-throughs with poor estate agency practice but it is refreshing to see (at last) focus being pointed at freeholders and managing agents as well as the searches that local authorities provide.

Managing agents acting for freeholders can often take an inordinate amount of time to provide information about how a building is managed and financed - setting compulsory service standards on their response time will be a big help. And all too often the last piece of the conveyanceing jigsaw is the local authority search despite often being the first thing applied for - setting a maximum time permitted to provide a search will help too."

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