Estate agents forced to tell the truth, shock

Estate agents who knowingly inflate the value of houses or send out bogus mailshots could face prosecution, under a Bill in this week's Queen's speech.

A Bill outlawing the most exploitative practices of rogue estate agents and stopping them from preying on vulnerable people is to give unprecedented redress to people buying and selling houses.

Alistair Darling, the Secretary of State for Trade and Industry, is preparing to bring in a new law to force estate agents to join a ombudsman scheme so that dodgy selling practices can be formally investigated. About one in five people say they have had problems with an estate agent, and investigations have found firms employing such sharp practices as helping buyers to take out huge mortgages.

The new government code follows complaints that some estate agents put pressure on buyers to buy overvalued homes to increase their bonuses. Others have been accused of colluding with buyers to drop the offer price just before contracts are exchanged.

Under the new consumer protection law, estate agents will also be prevented from using aggressive sales techniques, including refusing to leave a person's home until an agreement to sell a home has been signed.

Government sources said that the measure would be a key part of consumer protection legislation which will stop aggressive door-to-door promotion techniques. Salespeople who prey on vulnerable people, such as those with a relative who has recently died, could face prosecution under the new law.