Estate agents are being urged to sign up to a new code of conduct by the Consumers’ Association (CA) that commits agents to value homes fairly, declare conflicts of interest, pass on offers to sellers in writing and avoid high-pressure sales techniques urging buyers to use favoured mortgage schemes.
“Industry chiefs often tell us it’s only a few rotten apples that spoil their reputation,” says a spokesman for the CA. “So now estate agents can really convince us they are not out to con home movers.”
Last week’s initiative followed a report in March by the Office of Fair Trading (OFT), which had been probing the estate agency industry for two years, that merely asked for a voluntary code of conduct to be introduced. The Royal Institution of Chartered Surveyors (RICS) said the report “bottled out” and the CA called it a “fatally flawed damp squib”.
The housing bill going through parliament calls for a single system of redress for consumers, but has left it to the industry to come up with details. By 2006, the government also wants agents to keep full written records on all property transactions and ensure their contracts with customers are simpler and easier to understand.
“The government is tinkering around the edges,” sighs Louis Armstrong, chief executive of the RICS. “The real root of the problem is that anyone is able to set themselves up to practise as an estate agent. We must have some form of compulsory licensing.” The government insists licensing would restrict entry into the profession, leading to less competition between agents and possibly higher fees.
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Consumers find it difficult to take action against agents unless they have broken a law. In 2003, there were 5,356 complaints to the scheme run by the Ombudsman for Estate Agents (OEA). Most concerned fees, valuations and the timely passing on of information to buyers and sellers. But the OEA’s powers to act are restricted to members of the scheme — and less than 40% of practising agents are on its books.
Consumers can complain to the National Association of Estate Agents, but their toughest sanction is to expel members — a low-profile gesture, especially as only 9,500 of an estimated 28,000 UK agents are members.
Jennie and Robert Wright, from Brampton near Carlisle, allege their home was undervalued. Prices in the area are among the UK’s lowest, but the couple complained when an agent valued their two-bed semi at just £39,000, when they claim nearby houses were selling at £75,000. They complained to the OFT but were informed that, as the agent had not broken any law, no action could be taken even if the valuation was deemed too low. The Wrights say their property has now been valued at £70,000. “Complaining was an absolute waste of time,” says Jennie.
In London, businessman Angelo Sassi takes the same view — even though he believes he lost £150,000. He sold his Kensington flat in May 2003 for £600,000 after an agent asked him to reduce the original price of £750,000. Three months later the flat was back on sale, through the same agent, at £825,000. It sold within weeks.
“Naturally I was suspicious. I wrote and got a reply back saying there wasn’t anything underhand. But it’s just his word against mine, so I feel I don’t have any power to take it further,” says Sassi.