No further action is to be taken over the ‘quick house sale’ industry, despite calls for regulation to protect vulnerable people.
And no company will be held to account over past conduct.
This is despite the OFT admitting that some house sellers have lost out “significantly” to quick house sale companies.
Wrapping up its investigation into four companies in the sector, the OFT said yesterday that none had been asked to make any admission “as to liability in respect of past conduct”.
All four of the companies have, however, promised via undertakings to the OFT to improve the way they do business in future.
Asked for further clarification, an OFT spokesperson told EAT: “No admissions have been requested by the OFT, or made by the companies, as to liability in respect of past conduct.
“The purpose of the undertakings is to ensure that, going forward, the practices of these companies reflect a standard of good practice and address market-wide concerns highlighted by our study into the quick house sales sector.
“It is our intention that other businesses within the sector take note of our investigation and the advice we have provided and review their own practices.
“Our primary aim was to ensure that we shaped future behaviour to ensure that consumers get a fair deal going forward, rather than focusing on whether the companies’ previous behaviour had or was likely to have breached consumer protection legislation.
“The undertakings were given and accepted on this basis and reflect what OFT considers to be standards of good and fair practice with wider application to the quick house sales sector.”
The four that have agreed too improve their business practices are: Box MX, BTA Properties, Property Rescue Ltd and Gateway Homes UK.
In July, the OFT – then investigating the quick house sale industry – opened formal investigations into the business practices of all four.
Yesterday, it was announced that all have now given promises as to future business practices which include:
• ensuring marketing materials clearly, accurately and prominently set out key information and risks relating to the sales process
• conducting valuations in a fair and professional manner, and in good faith
• promptly sharing with consumers relevant information about the progress of the sale, including anything that might affect the final offer price or completion date
• promising not to reduce conditional or final offer prices without a valid reason.
The OFT’s study, published in August, into the quick sale market earlier this year concluded that quick house sale companies can provide a beneficial service but that some of their business practices may not comply with the law.
These included giving misleading initial valuations, late reductions of the offer price and operating unclear fee structures.
As a result, some home sellers said bad deals had cost them significant amounts of money.
Gaucho Rasmussen, OFT director, said: “We are pleased these companies have constructively worked with us and agreed to undertakings which will provide greater clarity and confidence to consumers considering a quick house sale.
“We expect others in the sector to take note of the information we have provided and review their own practices.
“Anyone who wishes to sell their home should always consider their full range of options.
“Should they choose to use a quick house sale company, we advise that they consider carefully what they are signing up to, ask questions and seek independent advice if they are unsure.
“Moving house can be very stressful and it is important consumers understand how a quick house sale differs from a more traditional type of sale and what this means for them in practice.”
The OFT said it and its enforcement partners will continue to closely monitor the sector, where house sellers are typically offered between 10% and 25% below the market value of their home.
In April, the OFT will be succeeded by the Competition and Markets Authority.
A year ago, the BBC (link below) reported a rash of complaints from people saying that the price they had been offered by Gateway Homes UK was dropped at the last moment and that although the company said it would buy homes in as little as seven days, the company asked sellers to sign a contract giving it up to 12 months to complete.
The BBC also reported the Law Society wanting to see tough regulation.