Estate agent wins dispute over rival's false claims

One of London's leading estate agents has been found guilty of misleading customers after a rival complained about inflated claims in its adverts.

Foxtons was taken to the advertising watchdog by Winkworth in what is thought to be the first time one estate agent has turned in another for embroidering the truth.

The case comes as the property boom in the capital has stalled and prices have started to fall at the top end of the market, cutting into lucrative sales commissions.

One analyst said yesterday it was a telling sign that "a persecuted minority", which had previously "stuck together", was beginning to fight among themselves.

Winkworth complained to the Advertising Standards Authority that Foxtons was misleading when it claimed to sell £2.5bn of property a year, to have a 25 per cent market share in its catchment area and to have a testimonial for its letting department from the BBC's documentary and investigations unit.

The claims were withdrawn after the watchdog upheld Winkworth's complaints. It ruled the £2.5bn claim was a projection based on figures for the six months to come and that the claim for market share was based on properties under offer rather than sold. The ASA found Foxtons could not present written proof of a testimonial from the BBC.

Foxtons has expanded rapidly since it was founded in Notting Hill in 1981 by Jon Hunt, and has adopted an aggressive marketing policy. Employees are issued with distinctive branded Mini Coopers, and the company is opening new outlets that claim to be more like cafés than offices. Despite its success, Foxtons has not adopted any of the codes of conduct run by the National Association of Estate Agents or the Ombudsman for Estate Agents.

Yesterday Winkworth – established in 1835 – said it went to the ASA because agents who refused to adopt codes of conduct were going too far. Simon Agace, the chairman, said: "All our branches are members of the codes of conduct and agents who do not join are not competing on a level playing field. It is unfair, so when you see an extreme example you have to do something."

He said he had not broken any "honour among thieves" agreement and called for legally enforceable codes for the industry. "We are trying to prove a point that it has got to stop here. My challenge for Mr Hunt is to join the ombudsman scheme and become a respected agent," he said.

Hugh Dunsmore-Hardy, the chief executive of the National Association of Estate Agents, said Foxtons' adverts would have been a "technical breach" of its code, had the agent adopted it. "We regard any breach that has an effect on consumer choice as serious. It is quite wrong that professional agents who agree to abide to a code of conduct are put at a disadvantage by other agents who do not."

Karl Daly, Foxtons' in-house lawyer, said the company was aware its claims might have caused confusion. He said Foxtons withdrew the adverts voluntarily. Foxtons kept the question of whether to adopt industry codes of conduct under constant review, he added. "It's not a question of having anything to hide, because you have to justify yourself to your clients. We have not found any [codes] appropriate for us or our clients," he said.