David Prosser: Why estate agents are the weak link

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The BBC's exposé of dodgy estate agents this week should have been shocking viewing. But while it was an excellent piece of investigative reporting, it's hardly news that these rogues get up to all sorts of tricks in order to earn themselves fat commissions.

What's really outrageous is that there is still no proper regulation of estate agents. For those who didn't see the BBC's Whistleblower programme, two undercover reporters filmed agents lying to customers, faking signatures and taking backhanders from property developers. The documentary portrayed a hard-nosed sales environment in which poorly paid young estate agents were encouraged to do whatever it took to clinch a deal and earn themselves sales bonuses.

There was a certain irony in the scheduling of this programme on Tuesday night. Just 24 hours previously, the Office of Fair Trading (OFT) announced it had approved a code of conduct for the estate agency industry.

The competition watchdog proudly announced that it had persuaded the National Association of Estate Agents to sign up to the Ombudsman for Estate Agency scheme. As a result, from next month, seven in 10 estate agents will be subject to policing by the independent Ombudsman, which has the power to order companies to compensate customers who have been mistreated.

I'm afraid that's just not good enough. Never mind the fact that a third of agents - likely to be at the unscrupulous end of the business - will still not be covered by the scheme. A voluntary code of conduct, with no statutory backing for the Ombudsman, is not enough to protect homebuyers and sellers.

In March 2004, the OFT gave estate agents a final warning. It promised to introduce compulsory regulation unless the sector cleaned up its act within two years. Two years on to the day, we have yet more proof there has been no clean-up. Yet suddenly the OFT thinks a voluntary code of conduct will do the job.

It's understandable that the Government is reluctant to give the Financial Services Authority yet another industry to regulate. But while the chief City watchdog already has its hands full, if ever there was a business that needed closer supervision, estate agency is it.

For most people, buying a house is the biggest single financial transaction of their life. Everyone else involved in the deal - solicitors, mortgage lenders, surveyors and financial advisers - is strictly regulated, so why should your estate agent possibly be any different?

Becoming an estate agent is hardly the toughest challenge. There are no exams to pass or standards bodies to satisfy. Judging from Tuesday's programme, all you need is the ability to forget about your conscience while saying anything to clinch a deal.

In a business where agents get very low basic salaries and large commissions if they hit sales targets - plus constant pressure from managers - abuses are inevitable. And until estate agents are properly policed, expect to see plenty more programmes like Whistleblower.

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