Should there be compulsory regulation for estate agents?

Alex Johnson

a827c9e82a4e6c3dd02fdf5921beffa98c95f07f 300x225 Should there be compulsory regulation for estate agents?More than 90% of homebuyers believe there is a need to have compulsory regulation to better protect buyers, according to a new survey from the Royal Institution of Chartered Surveyors (RICS).

Of those who failed to check whether their agent was a regulated member of a professional body, only 54% said they trusted them to provide honest and truthful advice.

While all sales agents are legally bound to offer a customer redress scheme, those who are not members of a professional body are not obliged to meet minimum standards, nor are they subject to regulatory monitoring. As a result, homebuyers are potentially dealing with an agent who could be providing inaccurate advice.

Only agents who belong to a regulated professional body such as RICS are bound to a strict ethical code and obliged to meet minimum competency levels. If RICS agents fail to act in accordance with rules of conduct, they are subject to investigation and sanctions. In extreme cases, agents can lose their chartered status.

“These results show a shocking lack of consumer trust in the estate agency profession,” said Peter Bolton King, RICS Global Residential Director. “Clearly, when people are making the biggest purchase of their lives, they want to know that they can trust their agent and the advice they’re given. People who are buying or selling a house should always check that their agent is a regulated member of a professional body who abide by ethical codes.

“By using an unregulated estate agent, people are potentially dealing with someone who doesn’t understand their obligations to consumers. Although all estate agents must have a redress scheme, these only deal with complaints once something has gone wrong. This is like closing the stable door after the horse has bolted. What is needed is compulsory regulation for all agents that helps to raise standards and prevent problems from occurring in the first place.”

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  • hayneman

    Self regulation rarely works.
    Apart from estate agents and politicians, just look at the press…

  • hoinarylup

    Not more regulation, please! Far too many things are being regulated by the government these days. Government doesn’t usually do a very good job of it. Their efforts tend to be hidebound and intrusive.

    They aren’t usually very well enforced, either, which rather removes the point. All well and good to say the State ought to regulate this and that, but there comes a point when overload sets in and things begin to slip. We’re almost certainly well past that point. This is not a bad thing, because if all the laws, regulations and standards were 100% enforced 100% of the time, life would simply become impossible.

    Also, the phenomenon of “agency capture” means that government regulation cannot always be relied on to protect the consumer. Agency capture is when the group that is being regulated uses its money and clout to hire lobbyists and/or buy politicians, to ensure regulation works very much in their favour, so they can go on with getting away with things they shouldn’t. It happens more often than it should.

    First, it is not hard to check a great many important aspects of a property yourself. So guidance needs to be made easily available on how to for those who don’t know. Secondly, once you have exercised due diligence, if you still end up in the brown stuff because the estate agent has either lied or concealed important facts, legislation should make it easy, straightforward and simple to sue them for the resulting loss, aggravation and distress, without limit of liability. That should cover the case.

  • jonno

    It’s not just a question of regulation for estate agents. For decades there have been too many vested interests pushing up house prices way ahead of inflation, creating the bizarre notion that your house is not a home but an ‘investment’ on which you should expect a return. (All this does ultimately is create a bubble, which sooner or later has to burst. Along the way there is a generation of disappointed would-be ‘first-time buyers’.) Almost anyone involved in selling property – developers, builders,
    surveyors, estate agents, mortgage providers – has an interest in boosting
    prices. Throw in miss-selling of mortgages, self-declared mortgages and complete disinterest on the part of government and you have the vastly over-inflated property prices we now see in the UK. It can only be a matter of time before the chickens come home to roost and the role of inflated property prices and the resultant demand for credit (not just for property buying but generally as overstretched house-buyers turned to credit cards and loans to fulfil their lifestyle aspirations) in adding significantly to the impact of the recent crash and our present predicament is realised.

    The horse may long since have bolted as far as the opportunity for imposing any restraint is concerned but we might at least start thinking about how we want the property market to look twenty years from now…

  • saffrin

    “Homebuyers are potentially dealing with an agent who could be providing inaccurate advice”.

    Well, who’d of thought?

  • Fitz1309

    I have just bought a house and I simple don’t trust anything the estate agent tells me. I will check everything that is important myself as I don’t believe the majority of estate agents are in the least bit competent.

  • Giles Toman

    No, we do not need another pointless body empowered to “regulate” what people can do! It would be cheaper and simpler not to have such a body. Let people decide for themselves by actually looking at a house if they want to buy it or if they think the price is fair or not. What good will a “regulator” do exactly, and how?

  • Trevor Mealham

    In September this year regulation changed for those giving advice or information to clients buying or selling homes. It would be wrong to currently bring licencing in and since September Joe Public is now protected from incorrect information given AND information left out.

    The UK property market runs on the antiquated data structure that rightmove created a good 16 years ago. The data structure has stopped agents working together. New technology MLS alike the USA is being introduced into the UK which allows agents to introduce applicants and properties to one another.

    RICS does not recognise this better technology yet which could be the platform to introduce licencing. Until such time the September changes brought heavy regulation to agents.

    Trevor Mealham
    INEA mls idx (The Independent Network of Estate Agents)

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