Unforgiven: estate agents to be rounded up

The cowboys are at last being brought to book. But is the new Bill tough enough for the job?
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The Independent Online

Another TV programme about the men and women who help us buy and sell our homes, another burst of anger from the public.

This one, screened on BBC2 on Friday night, was called Beat the Estate Agent.

No prizes for guessing its premise: to show viewers how to offload their property without paying hefty fees to a reviled profession.

Cutting out the middle man is becoming ever more popular with sellers, who can save thousands of pounds. There are several ways to do this: use the internet to market your property yourself; pay a flat fee to a property website to do it for you; or use the cut-price service offered by the supermarket giant Asda as it muscles in on the market.

The dire position in which the traditional industry has found itself will come as no surprise to millions of Britons. Along with complaints about pensions and endowment mortgages, more readers contact The Independent on Sunday Money desk about estate agents than about any other subject.

Recent correspondence has included allegations of misrepresentation, shoddy service, rudeness and even courtroom dramas. Many people continue to express shock at the dearth of regulation and the lack of professional qualifications for those joining the industry.

The Queen's Speech earlier this month included a Bill to tackle poor practice among estate agents. But despite the proposals for reform, consumer bodies warn that those who put their homes on the market are still being sold short.

Nonetheless, the Consumers, Estate Agents and Redress Bill, proposed by the Department of Trade and Industry (DTI), should push through important benefits. The industry's current voluntary code of practice covers only two-thirds of agents, leaving thousands of consumers without any protection in the event of a dispute. Under the new Bill, all agents will have to join a compulsory scheme, with an independent ombudsman established to force estate agents to pay up if it finds against them.

Any agent that refuses to join the scheme will be banned from trading; all must keep written records of transactions, to be open for inspection for six years.

But critics say these changes - unlikely to make it into law before spring 2008 - do not go far enough.

There will still be neither formal regulation nor a requirement for minimum standards in the shape of any professional exams.

And the "lettings", or rental, market will remain outside the remit of the proposed legislation.

"Our proposals come in response to an OFT report on estate agency services, which concerned itself only with the buying and selling of property," says a spokes-man for the DTI. "[However], there would be nothing to stop the approved compulsory ombudsman scheme dealing with complaints about letting agents on a voluntary basis."

Another question mark hangs over whether there will be one single industry ombudsman or two, with powers and responsibilities divided between them. This idea "hasn't been ruled out", adds the DTI spokesman.

That worries those who run the current voluntary schemes, including the Ombudsman for Estate Agents (OEA).

"You need a single code of protection that consumers can refer to," says Stephen Carr-Smith, head of the OEA. "If there's more than one ombudsman, [I fear] estate agents will wriggle to the lowest common denominator."

The OEA wants to be appointed the new statutory ombudsman but it could face a challenge from the Royal Institution of Chartered Surveyors. The final decision rests with the OFT.

The consumer body Which? has run its "Move It" campaign for two and half years, lobbying the Government to introduce regulation and licences for estate agents, to be awarded by an independent body. It says the Bill falls far short of what is required.

"The lack of [industry] qualifications is worrying," says campaign manager Louise Restell. "A licence would be a reassurance for consumers - it's not easy to see if you're being duped by an unscrupulous agent."

Peter Bolton-King, chief executive of the National Association of Estate Agents, agrees. "The Government seems to think that redress on its own is enough," he says, "but you need to make sure that the problems don't emerge in the first place. Qualifications would keep the consumers happy."

Which? is to brief the House of Lords ahead of the Bill's second reading. It isn't convinced that the OEA is the right body to be put in charge and says consumers don't really know what to expect from its current redress system.

"There are 10,500 estate agents and in 2005 there were 6,201 complaints - that's more than one for every other firm."

The number of initial inquiries to the OEA has risen by 70 per cent since 1998. They reached a peak in 2002 at 6,462 before slipping back, but have bounced back from last year's 5,500.

For now, the best advice to buyers and sellers is to pick an estate agent that is a member of the OEA's voluntary scheme (the OEA symbol has to be displayed in the window). And they should ask plenty of questions of agents before appointing an agent.

"Ask about service levels, redress and whether they have a complaints procedure," says Mr Bolton-King.

If you're thinking of employing an estate agent who isn't a member, find out why they haven't joined and ask to speak to other recent clients.

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