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TODAY'S OTHER NEWS

Code of Practice for Estate Agents set to change industry forever

A new estate agency Code of Practice is to be written by a group set up by the Royal Institution of Chartered Surveyors and The Property Ombudsman.

It will be led by a Labour peer and should produce the code by the end of this year.

The steering group - which also includes representatives from ARLA and NAEA Propertymark, Trading Standards and sales and lettings industry trade bodies - is charged with developing what RICS and TPO call “an overarching code of conduct for residential property agents”. 

It will be independent under the chair, Baroness Dianne Hayter, and is the first attempt to enact one of the many recommendations put forward a year ago by the Regulation of Property Agents Working Group.

That group called for an independent regulator, licensing for all agents, a new code of conduct, mandatory qualifications and a new form of redress more powerful than existing operators: until now, none of these recommendations had been acted on, and even this morning’s new announcement addresses only one of the proposals.

The new Code of Practice is likely to be a single, high-level set of principles to be applied to all residential property agents; there will also be a number of other more detailed sections developed that are specific to various aspects of the residential property agent sector, such as sales, lettings and management.  

A statement from RICS and TPO says the code is being prepared so that it can be “handed over” to the new regulator once that role is established.

The Code of Practice Steering Group will consist of consumer and sector representatives who “will work collaboratively and in the public interest, and those participating in the group do so voluntarily, in good faith.”

No names or organisations have been named so far as being involved. 

A draft on the new code will go out for consultation this month, July, when according to the TPO and RICS “feedback from users, professionals, buyers, sellers, lenders, tenants and landlords will be sought.”

Baroness Hayter is a Labour peer whose CV includes being Chair of the Legal Services Consumer Panel, Vice Chair of the Financial Services Consumer Panel and a member of the National Consumer Council. She also chaired the Property Standards Board.

“The forthcoming combined code will ensure that consumers are clear what standards they should expect from property professionals, and it will enable them to be confident that all residential property agents will be held to account in meeting them” she says.

“The independent Steering Group is undertaking this work to prepare an over-arching Code of Practice for the new regulator, very much within the public interest.  With both consumer representatives and cross-sector support and commitment to achieving this goal of a combined code, as proposed in the Regulation of Property Agents Report, it will raise standards and trust in the industry” she continues

The launch statement of the new body includes a quote from Housing Minister Chris Pincher who says: “Baroness Hayter’s appointment is an important development for property agents as they further raise standards in their industry and protect their customers. I look forward to continuing to work with all to ensure customers are treated fairly and that all agents work to the same high standards.”

Poll: Is this the right time for a new code of practice?

PLACE YOUR VOTE BELOW

  • Chris Arnold

    There's a killer problem within the estate agency sector and this does little to solve it!

    Estate agents are among the least trusted of professions and a few guidelines here and there, a set of ethics and a compulsory licence isn't going to make that go away.

    Words such as transparency have been bandied about, but more in the context of transactions as opposed to morals and character. None of this will change the public's perception. And, for those agents that put profit before people, they will find a way around these flimsy introductions.

    The problem is complex for agents in that there are so many variables. But homeowners aren't looking for the most competent agency. They're simply looking for an agency they can trust. We don't trust people based on their competence.

    We trust them based on their character and that's precisely where we need the transparency. Tell the vendor who you are, what you believe, how you think. Let them make a judgement of your character.

    Be different. Because different forces a vendor to choose, whereas better allows them to compare.

    Go ahead, make licensing compulsory but don't expect it to solve the problem.

    Lenny White

    ...and a legal system that protects the people. Ours is diabolical and an embarrassment.

     
  • John  Savage

    Can I ask Why there is a need for a new code of conduct?

    What is the industry doing that requires a new code of conduct.

    What are agents doing/not doing?

    The article doesn’t say?

  • icon

    Where are Propertymark in all of this?

    Algarve  Investor

    They're there, aren't they? NAEA and ARLA both sit under that brand.

    I never really know what the distinction is. Are Propertymark their own separate overriding entity, or are they just there to provide support to ARLA and NAEA?

     
  • Patrick Sullivan

    Surprised ARLA are playing a back seat role in this

  • Charles McDowell

    Why do we have such an obsession with regulation as the answer to everything .There are rogues in our business but not many & more regulation won’t stop them.We have rules which are more than adequate & an Omburdsman who does a perfectly good job.If more regulation & qualifications means we are more in line with the US then let’s bring our sales commissions in line too & charge 6%.

  • jeremy clarke

    I agree with Charles McDowell, if there is an expectation that this new code of practice is to bring agencies under the umbrella of being professionals then the fres charged need to mirror this. After 17 years out of property sales and just reentering the market, it astonished me how agents are prostituting themselves with such low fees! More legislation more red tape more qualifications really need to mean higher rewards.

  • Rebecca Eglinton

    Forget new code of conduct. Let’s get properly regulated. Will get rid of dead wood and we can start being seen as the honest , hardworking professionAls that most of us are. Too much red tape. JUST GET ON WITH IT Not all about fees just a matter of people having more respect for the good agents.

  • icon

    Totally agree Charles

    The problem is now we have a culture of “cheapness” where there is a race to the bottom on fees but red tape is increasing meaning good honest integrity goes out of the window as you are now scraping to make a living

    I find a lot of vendors want estate agency on the cheap then grumble because they are not getting the service they were expecting, if agents charged 6% on Sales fees and made a decent living they would work flat out for that client knowing they are getting paid well at the end of the sale.

    I know agents that have taken sales fees of £600 just to beat the hybrids, these agents have their minds on how they are going to pay their bills at the end of the day not on how best to serve their client

  • Richard Copus

    The NAEA/ARLA Codes of Conduct, along with the RICS Rules are the best in the industry and action is taken regularly against member agents who breach them. By far the most sensible and easiest solution would be for the Government to annex these codes and make them mandatory for all agents rather than starting again unnecessarily. James, I think Propertymark is an equal player in all of this, but you can ask at the AGM at 2.30 today!

  • Lenny White

    The archaic English Law needs addressing before anything. Precedent upon precedent and deference to the Crown makes buying a property in England so much more problematic than in Scotland. No amount of regulation, or governance can take away the emotions and stresses exerted upon our industry by our public who we're trying to serve which leads justifiable and unjustifiable to disagreements and disputes.

  • icon

    If I was selling mu house at 500K no way would I pay a 25k fee

  • icon

    Thinking about this I do not see how a code of conduct will enabler agents to increase fees. There will always be agents who will undercut fees top gain an instruction and there will always be vendors who will opt for the cheapest fee.
    I personally think that would be far more helpful would be for anyone who is an estate agents to have to go on a course that covers the law, legal process, money laundering procedures, misdescription, what things like indemnity insurance means for instance. Many chains are held up because of a negotiator with no experience who has no idea what he/she is doing. The corporate in particular do not care all they want is a load of kids on low wages ringing and e mailing all day.

  • icon

    As our agency insists that all staff must be qualified for membership of NAEA or ARLA (and until they are, are described as apprentices) I am extremely happy to see this tightening up of regulations. Nothing to fear if your agency has always operated to the highest possible standards. Plenty to fear if you're a marketing agency / property platform masquerading as an estate agency, with self-employed workers let loose to sell listing packages without competency / knowledge / experience / longevity in the local marketplace or indeed any industry-recognised professional qualifications. Bring it on.

  • icon

    I have been away from EA five years and these sites, I am convinced a similar headline existed more than once perhaps 10-15! years ago. It’s a pretty regulated business away, yes any area to make big fees will attract rouges, however I think the bulk are honest, what ever that can mean in such a competitive world. Unless laws are in place for the public to have to adhere to the same

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