Watchdog set to savage estate agents

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The Independent Online

The Office of Fair Trading is today expected to publish a highly critical report into the way estate agents operate.

The regulator has spent 21 months investigating the market and is expected to come out with a series of findings on how estate agents operate against the best interests of consumers. The Department for Trade and Industry will then need to respond to the concerns raised by the OFT and the recommendations made.

As well as the issue of tackling "rogue" estate agents, the OFT is expected to come out against a number of practices that are common throughout the industry.

Groups concerned about the estate agent market said they hoped the OFT would force reform of the standard sorts of contracts between a home seller and their agent. This would include the practice of tying sellers in to a sales contract, for up to 12 weeks, and charging more for multi-agency agreements.

Kay Davis, the director of the website PropertyBroker.com, which competes with agents, said: "Hopefully the OFT will have taken the opportunity to highlight the absurdity of the estate agent monopoly. For too long consumers have been subjected to unfair contract terms and dubious practices."

When the OFT began its inquiry in 2002, the organisation said there were "signs of increasing concern from consumers about the services they receive from agents".

The watchdog's report, which will be published today, will examine fees structures and "whether they represent value for money".

It will also look at the effectiveness of competition in the market and how the process differs in other countries, including Scotland.

The study will examine the impact of the internet on the sales process and whether the popularity of websites for selling properties, including private sales, make redundant the traditional relationship between seller and agent.

Consumer groups have called for a flat fee to be offered for some transactions. Currently agents tend to charge a percentage of the selling price, meaning that their commission is continually going up with the rate of increase in house prices.

Peter Bolton King, the chief executive of the National Association of Estate Agents, said yesterday: "I don't mind criticism, as long as it is just."

He said that the Government ought to "give teeth" to his organisation to allow it to regulate the industry in much the same way that there was self-regulation of surveyors through the Royal Institute of Chartered Surveyors.

Referring to rogue operators, he said: "We need the ability to stop people trading."

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