A large part of the DCLG’s Call for Evidence on the home buying and selling process focuses on the role of estate agents, the work you carry out and the industry's regulatory structures, asking specifically whether there should be more regulation aimed at agents.
For those agents who have spent any length of time in this marketplace, the questions asked in the Call for Evidence will be of no surprise; indeed, you might surmise that you have been here before and will probably not be holding your breath in terms of seeing the changes you want to see, and delivering a real improvement in the process.
In fact, you might well believe that the problems involved in buying and selling property lie elsewhere in the process and that agents are in no way responsible.
Of course, you’d be well within your rights to say that, but I’m not so sure that this consultation is going to go the way of many others in the past. By this, I mean that we at the Conveyancing Association, having met with the DCLG on a number of occasions, believe change is coming, and that the Government is committed to delivering in this area.
Let’s not forget that a minority Government has to choose its battles carefully in order to get the support it needs – while housing policy can be contentious, we don’t get the sense that there is much in the way of opposition to improving the process and if it means some big-ticket, market-changing measures need to be introduced then so be it.
So, in our opinion, we have to start from a position that this is going to happen and probably happen quickly. But, what next? Well we’ve drawn up our initial response to the Call for Evidence which is currently being shared with members however I wanted to provide some detail on our initial thinking, specifically on the questions related to agents.
At the outset, I should make it clear that this is not a question of blame. I think we’re all aware of the challenges right across the piece and, in our response, we highlight that agents are, in general, just as hamstrung as conveyancers by the system.
Our view is that we need to inject more certainty into the process, and a greater degree of clarity for all concerned – one of the ways we do feel this could be achieved is via binding offers, perhaps in the form of reservation agreements as we have in new-build, which would mean less discomfort for agents and their clients. Plus, it might dial down the level of stress that many feel when going through the process.
Another area which is highlighted in the Call for Evidence is around the complaints process and whether consumers are aware of where they go to make those complaints.
Our view is that there is plenty of information available on who to complain to, whether that is the redress schemes or the National Trading Standards (NTS). Our issue is around the resource available to those that hear and judge those complaints – NTS, in particular, appears to be seriously under-resourced issuing just 11 prohibition notices last year.
NTS is also reliant on Local Trading Standards to enforce the Consumer Protection from Unfair Trading Regulations 2008 (CPR), particularly in relation to marketing and advertising of property, which the Property Ombudsman’s annual report said was the second most commonly complained about issue.
If this isn’t being complied with by agents then consequently buyers are not provided with sufficient information prior to offer, and can therefore be exposed to some ‘nasty surprises’ during the conveyancing process, by which time it’s often too late to do anything as they’re already emotionally and financially invested in the property.
We believe there needs to be effective enforcement of CPRs to provide home buyers with a better moving experience.
On the wider issue of more regulation for agents, we’re not of the opinion that this is necessary. Our view, as outlined above, is that better enforcement of the existing regulation would provide just as much benefit, as ripping up that regulation and effectively starting again or pushing more regulation on top.
NTS is responsible for existing regulation but has a miniscule budget of £250k in order to be able to police the entire market – that’s simply not sufficient and, as time goes by, with inflation and the like its ability to do more with a limited budget will continue to be hindered.
The big question is how that resource is paid for and, here is where we might well differ with agents, because it’s our belief that estate agents themselves need to pay for its provision in order to enable the fair and proper operation of the system.
Our view is that it’s not in the best interests of those agents who are complying with the CPR to have others in their sector, flagrantly doing the opposite. Far better we think to up that resource, police it effectively and send a message that such activities are not part of a 21st Century home-buying process.
There is still some time to debate these issues and many others, and we would certainly like the estate agent community to engage with this, and if possible, to attend our Annual Conference on the 7th of December.
The closing date for the Call for Evidence consultation is the week after and such input would allow us to firm up our views, suggestions and proposals, for what is likely to be a ground-breaking moment for our industry.
*Eddie Goldsmith is Chairman of the Conveyancing Association (CA)