With new research showing that less than half of consumers think that estate agents pass all offers to sellers, when failure to do so is an explicitly criminal act, Which? is adopting the unprecedented approach of demanding that the government reject the recent Office of Fair Trading’s (OFT) ‘woefully inadequate’ recommendations to deal with the problem and act now to protect home-movers.
Which? is also calling for the regulation of estate agents to be mandatory. While Which? is lobbying government and industry hard to ensure that this happens as soon as possible, the government needs to undertake an immediate review of the Estate Agents Act. The present legislation is unenforceable, leaving consumers at the mercy of untrustworthy estate agents, who earn £4 billion in fees per year from property (an average of £2,100 per transaction).
Which? found that estate agents regularly break the law by, giving preference to buyers who use their mortgage services, by inventing offers to tempt buyers in to upping the price and by failing to pass on all offers to sellers in writing.
Which? research further reveals just how poorly regarded estate agency services are
* Only about one in ten home buyers and sellers strongly agree that estate agents can usually be trusted
* 70 per cent think that estate agents frequently give misleading information about properties
* 70 per cent think that estate agents and property developers frequently work together to line each others’ pockets
* Over half think that estate agents frequently invent offers from non-existent buyers.
1.8 million property transactions take place each year. However, the present ‘regulatory’ structure which comprises mainly self and co-regulation, is poorly enforced and lacking any effective monitoring. This so called ‘soft law’ leaves the public without any real form of redress, and estate agents under no obligation to protect customers from the kind of problems identified by the Which? research.
Currently there is nowhere that the public can go for independent, trustworthy information on the home-buying process. So, to help home-movers protect themselves against rogue estate agents, Which? has set up a dedicated website (www.which.co.uk/moveit). The site offers tips on how to get the most out of estate agents and warns of the problems consumers often encounter. The website also invites consumers to share their experiences of estate agents.
To illustrate just how easy it is to trade as an estate agent and to show the lack of regulation governing the industry, the director of campaigns at Which? has registered as an estate agent and has opened a temporary estate agency in central London. He has had no training in the property market and no knowledge of the Estate Agents Act.
Nick Stace, director of Which? campaigns, said:
"Dodgy practice has left the public exposed to the unchecked, often illegal whims of rogue estate agents for far too long. And the recent OFT report wimped out of a perfect opportunity to protect long suffering home-movers.
"The situation is ludicrous. With estate agents reaping huge financial rewards but offering, at best, very little service in return, and at worst extracting large sums of cash from consumers on false pretences, the government must step in and reject the OFT report as well as order an immediate review of the unenforceable Estate Agents Act.
"The industry itself has called for better regulation; recognising the need to protect honest practices and individuals in the industry. The question however still remains: why are the regulatory powers shying away from providing consumers with the basic right to be protected from unscrupulous estate agents?
"Which? is stepping in where the OFT has failed to ensure people get a fair deal when making the biggest purchasing decision of their lives."
