Labour MP and Shadow Consumer Minister Stella Creasy wants to make sure the way in which estate agents charge continues to be regulated effectively.
She spoke out after hearing reports of some estate agents charging both buyers and sellers as property demand increases.
Her comments have been timed around proposed regulatory changes which could see the Government transfer responsibility for the England and Wales industry to the Powys and Anglesey Council Trading Standards.
Creasy said: "With the terms and conditions of contracts for buying and selling houses causing increasing concern, now is not the time to turn a blind eye to these problems.
"There is evidence from the London housing market that estate agents are now introducing new contracts which involve charging buyers a fee to be introduced to a property.
"This means they have to offer a lower price for a property as they have to cover this cost as well as the purchase price. Consequently sellers could get less money for their property despite also paying for the estate agent's service. The only people who do well out of these kinds of sealed bid' deals are the agents who get a nice fat fee from both the buyer and the seller.
"The Ombudsman calls this an emerging commercial practice' meaning it may be starting in London but without quick action it could spread across the country.
"It is problems like these that make me disappointed that the Government is pressing ahead with plans to give the oversight of all estate agents in England and Wales to the Powys County Council Trading Standards and isn't reforming the provision of Ombudsman services to give consumers a uniform complaints process. Many home buyers are frightened to challenge the agents and these unfair contract terms as they think they will be locked out of our housing market as a result, compounding the risk there could be an enforcement gap developing.
"That's why we need a fresh approach which gives consumers real protection... and will be pushing the Government to think again - we are determined to give Britons the consumer rights they really need to get a fair deal.
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Comments
Well, in my 'apparent' uniqueness I'm giving a prime example showing that the way the UK housing market operates is badly distorted, as is evidenced at present, in London.
In The Financial Times today it is reported and I quote: "Sharply rising prices are undermining government efforts to help more people on to the housing ladder. The average price of homes bought by first-time buyers rose 7.4 per cent significantly faster than the 4.7 per cent increase experienced by other buyers, the ONS data showed.
Stephen Smith, director of Legal & Generals mortgage club, said the situation in London would soon make the capital unaffordable for ordinary families."
Plus "The rest of the country was seeing price rises that were broadly comparable to the rate of inflation, Mr Smith pointed out. As such, the wider picture in the UK shows a pretty orderly market with a modest rise and no housing bubble, he said."
But what is not fully reported is that volumes of completed sales are running at a mere trickle compared with pre-crash throughput; and even that wasn't particularly high at the time.
Again this strongly suggests that things are far from right in housing-marketing circles.
My take on this is that we are almost running at pre-crash house price levels again, suggesting that the house price crash only lasted a year or two. ONS graphs clearly confirm this is so. In effect we are back in a house-price bubble, even though there is no commensurate economic recovery - quite yet.
Until prices moderate themselves down to market affordability levels, sales throughput cannot possibly re-establish itself.
My proposal for accomplishing this without the need for direct intervention in the marketplace (the latter never being a very good idea), is to re-organise estate agents so that they have to deal with both sales and purchases on behalf of individual clients.
If they were to be responsible to do both, they would get real hands-on experience of current market prices and thus be better able to advice both buyers and sellers on the state of the housing market at any particular time (and location).
Unless this is done very soon, first time buyers will be shut out of large parts of the UK, the very thing the government does not want to happen.
If first timers are shut out, prices will eventually fall anyway but by that time immense damage will have been done to the Nations' economy. That is too high a price to pay for letting the market simply sort itself out and most economists know that complex markets like the UK housing market don't naturally tend to sort themselves out anyway. It's well known that such markets need clever external management in order to become and remain efficient.
Doing nothing about this, simply isn't an option.
"No, actually. It's not a bad job (as you put it). It's just that you can't see it. :p "
Ahhh, well - at least I am not alone in my 'blindness', Sir. Population of the planet is somewhere around 7.15 billion - and apparently YOU are the ONLY one who CAN 'see'.
You are a party of one, I am afraid. The last of your kind - double sad because you were also the first, apparently.
Enjoy your uniqueness, RR.
@ PeeBee
No, actually. It's not a bad job (as you put it). It's just that you can't see it. :p
Oh, for Heaven's sake, Mr RR - WHEN are you going to give it up as a bad job
Those agents that are introducing this practice must feel there is an advantage in doing so, in some way.
It must be that they can see that buyers need more of a service, but just charging them is going off half cock.
What really needs to happen is for some agents to decide they want to change business model completely and not only help vendors sell, but also help the same vendors to buy as well.
Can't anyone see this - yet
Politicians... estate agents... traffic wardens. No surprise if this goes on.
Lovely more red tape - however, I actually thought this practice was illegal unless you inform your Vendor [i]in writing[/i] that you are receiving a fee from the buyer. If this is not declared then it is illegal, and if it is paid in cash this is covered under the Bribery Act.
Again another thing that wont tarnish the bad agents and just give the good agents more paperwork they needlessly want - gonna increased the Carbon footprint - are we not a lucky bunch!
They are called buyer and seller agents and they happen to use them around the world.The British industry is far behind everyone else. The fees are often split with the selling and buying agent. Why do agents not charge 4% + like other countries do as there is a service given after all. They could even include the solicitors fee. Then the buyer agent and selling agent can split fee 50/50.
Stop Cubitt & West doing the "Sale by Tender" - How can that be good for a vendor! - Hello purchaser, you need to pay me 2% so i suggest you knock that off the price! hmmmm who do agents work for Oh you are about to exchange.....by the way you need to pay us 2% as a selling agent if its within x years.....
Oh good - more regulation.