Regulation of estate agents ‘unnecessary’, says OFT
Solicitors have expressed disappointment that the Office of Fair Trading did not propose the regulation of estate agents in its home buying and selling report published last week.
Despite representations made by many in the industry, including the Law Society, the OFT concluded there was ‘not a strong case’ for introducing a dedicated regulatory regime for estate agents.
It said the current regime has a wide range of sanctions that can be imposed for misconduct by estate agents to ensure consumers are protected, and further regulation is unnecessary.
Instead, the OFT recommend improving the enforcement of existing rules and amending legislation from 1979 to allow new entrants, such as private seller platforms, to enter the market without being hindered by inappropriate regulation.
Overall, the year-long study found the housing market was dominated by traditional high street estate agents, which has led to weak competition. Failure by consumers to negotiate on their fees could have cost them up to £570m.
Commenting on the report Paul Marsh, Law Society property spokesman, said: ‘We’d have liked to see them recommend that regulation of estate agents was put in place to create a level playing field with solicitors, who are very heavily regulated.’
The Law Society wanted to see regulation governing the general conduct of estate agents, and in particular on the issue of referral fees.
Marsh said the lack of regulation was preventing entrepreneurial solicitors looking at ways in which they might do business more closely with estate agents following the Legal Services Act 2007.
At present, he said, the disparity in regulation between solicitors and estate agents makes it hard to combine the two businesses.
Richard Barnett, chairman of the Law Society’s conveyancing and land law committee, said it was unfortunate that the OFT had not recommended regulation of estate agents.
‘I’d like to see agents take the bull by the horns and introduce some form of a self-regulatory scheme,’ he said. He suggested that estate agents should introduce approved schemes whereby they sign up to say they will comply with the same rules as solicitors.
‘The sanction for failing to comply would be that our regulator would ban them from sending referrals to solicitors,’ he said.
Barnett said: ‘There’s no reason why the good estate agents wouldn’t sign up to an enhanced standard to differentiate themselves from the bad agents.’
Peter Bolton King, chief executive of the National Association of Estate Agents, added: ‘Once again the OFT has categorically failed to see that better regulation of the home buying and selling market is required… it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed.’
‘The NAEA would like to see a greater level of regulation to ensure that professional, qualified estate agents are not confused with agents that, all too often, fail to meet the basic professional standards we would expect from our members,’ he said.
Comments
Trust an Estate Agent, not a Solicitor
This government is utterly cynical about regulation.
Lawyers need to be controlled, as they represent a potential political threat to this and any other government and so must be heavily regulated by independent bodies. They cannot regulate themselves, despite the fact that satisfaction surveys say they do a good job.
The press are useful to the government and need to be kept “onside” , so they can regulate themselves, despite the fact that virtually every newspaper story contains an inaccuracy.
Estate agents charge ten times more than lawyers but a burgeoning housing market will help the economy recover, as will a chronic shortage of supply, so they must not be upset and can continue to regulate themselves.
It is not in the public interest for solicitors to mix client and office monies but banks can do it for they are vital to our well being.
Of course, the SRA continually bleating on about the public interest makes it very easy for HM Government to go on with these double standards.
What are the Law Society Council going to do about all this? Apart from moaning.
Where is the lobbying for a relaxation of the rules, to make us competitive in the future?
I am afraid it is the same old story. We are an elite profession who must abide by higher standards than anyone else. Individual solicitors can be bankrupted if they don’t obey the rules to the letter and the rules will be so broad that virtually anything the SRA disapproves of will be covered. In addition, the SRA will be free to change the rules by way of changing guidance. We must have full insurance, thus making us a target for every claimant in the country and we must have a complaints system which encourages vexatious complainants. Our complaints and disciplinary record must be published on line and so it will stay with us for the rest of our days, until we die.
The Law Society, of course, supports human rights and disproves of dictatorial regimes. I am sure it was very critical of “catch all” laws, such as the “Anti-Soviet Activities Law”. I am equally sure that it deplored the removal of housing from those who were merely suspected of Anti-Soviet activities and the “tarring” of such people, so that they could not function in civil society again. Their reputation following them, so that they could only get the most menial jobs in future. How barbaric but what a relief to note that these abuses eventually led to the wholesale collapse of the Soviet State and the Eastern Bloc.
OFT - can they regulate the legal profession, as they are good!
As Lawyers are regulated beyond recognition of a profession now, can OFT regulate us...they appear not to do any.
Don't forget Wolstenholmes!
I agree that Estate Agents should be regulated - in particular when they are recommending Solicitors and HIP suppliers - but those Solicitors out there should give a thought to the situation at Wolstenholmes Solicitors where clearly regulation didn't work!! http://www.fridaysmove.com/wolstenholmes-solicitors-and-bestconveyancing...
I guess to be fair it is paying out the people who lost out.
Wolstenholmes
Not sure I agree with your point David