Measures to professionalise the estate agency market were announced over the weekend by Sajid Javid, forming part of the government’s response to last year’s Call for Evidence on improving the home buying and selling process.
Since the announcement, a number of industry experts and organisations have shared their view on how the change could impact the transaction process, as well what they could mean for conveyancers.
Harvey Harding, Managing Director of PM Property Lawyers stated:
“Having reviewed the Government’s press release, which at this stage lacks detail, it is very promising.
“It is the case that the conveyancing profession has sorely needed the support of the Government with regard to the mandatory regulation of estate agents and managing agents in both the sale and purchase process, as well as with regard to leasehold management generally. All too often there appears to be undue delays and inconsistency within both managing agents and estate agents and our customers have little redress.
“We welcome the further professionalism of all parts of the market as it will really benefit customers at all stages and hopefully reduce fall through / aborted transactions. The devil though, will be in the detail – ie. what the qualification for agents looks like and whether there is a mandatory redress scheme such as the LeO. Will there be mandatory ongoing training and CPD?
“There will also be a real challenge in mandating a 10 day response period from Local Authorities, knowing that there are still a number of the same who are fully paper based and this also could be the case for managing agents.
“On the whole, the headlines are promising. The challenge is aligning these with practical reality and the investment required into regulation, oversight and management – which will take time and money; and bearing in mind the Government is stretched on such fronts as the NHS and Brexit, I for one will wait and see what happens but implore the Government to hold firm and invest properly.
“Finally, I would also add that it is incumbent on solicitors and licensed conveyancers to take action themselves to make sure their own houses are in order, processes are customer-centric and we as a community work for the good of our consumers by investing and innovating ourselves.”
Paul Saunders, Managing Director of Legal Eye stated:
“We welcome the government’s push to assist the estate agents market to deliver the best service they can. It is one of the few parts of the house buying process that is unregulated and the public are entitled to expect to be protected when they are making the largest financial commitment of their lives. They are already required to comply with AML and will be subject to the GDPR in May, so now is a great time for the most proactive agents to take advantage of the support that is out there.”
Paul Norris, Managing Director of Gordons Property Lawyers stated:
“Regulation of estate agents and managing agents to ‘drive up standards’ to reduce uncertainty and delay in a stressful process is very welcome. As for reservation/conditional sale agreements this has been an option available to sellers and buyers for many years. Their use is often determined by the strength or weakness of the property market and the demand for a particular property at any particular in time.
“Speeding up the provision of essential information, reducing cost by professionalising the estate agent market and regulating managing agents coupled with a ten day turnaround in searches will hopefully assist in their wider use. However, will voluntary use provide the certainty required and align personal and family agendas in a chain transaction; what’s more, does this go far enough?”
Simon Bath, CEO of When You Move said:
“The Government’s latest announcement is a big step towards creating a more transparent, faster, customer-centric industry. Whilst moves should be made to bring an end to ‘rogue managing agents,’ it’s also important to celebrate and forefront the many estate agents who provide an excellent service to their customers, and give them the tools and regulatory support to continue to do so.
“New measures like timelines for local searches will speed up the buying process, and voluntary reservation agreements should reduce the high number of sales currently falling through. Although we’re making progress in terms of transparency and speed, there’s lots more to be done to modernise and digitise the industry, so I look forward to hearing the actions from the working group.”
Rob Clifford, commercial director at property specialist SDL Group and CEO of estate agency franchise CENTURY 21 UK stated:
“It’s been 18-years since regulation and mandatory qualifications for mortgage advisers were introduced, so it’s certainly not before time. This is the last such industry with no barriers to entry and we’ve been left in a situation where an unqualified carpet fitter or a van driver can trade as an estate agent without evidencing competence. I’m not surprised many have been left wondering what on earth has taken so long to get to this position where the government is finally taking it seriously.
“What we need to remember is that there are many very good estate agents out there who are not professionally qualified or vastly experienced, but are actually doing a brilliant job. It shouldn’t be about driving these people out of the industry. Instead, we should be focusing on the ‘men of straw’ who can’t afford to run a competent business or compensate consumers who suffer failure. These are the ones who need to go.
“It will be interesting to see if this goes in the same direction as mortgage regulations, which started with a mandatory qualification and then moved on to professional indemnity insurance, the Ombudsman and eventually full statutory regulation. I guess time will tell but hopefully we won’t be waiting another 18-years to find out!”
The HomeOwners Alliance said:
“It’s been clear for many years that the current system is not fit for purpose. Buyers and sellers regularly pay referral fees and other hidden charges without fully understanding what they’re paying for. As a weakly regulated and inadequately enforced industry, many agents themselves do not understand the consumer laws they are required to abide by. This causes a huge detriment of both buyers and sellers, and sales are falling through regularly causing heartbreak and costing thousands.
“Proper regulation of the estate agency sector is fantastic news. Estate agents play a vital role in the sale and purchase of one of the biggest assets were ever likely to own yet for too long they’ve had no prescriptive rule by which to operate. This announcement will give homeowners and buyers greater assurances when getting involved in the buying and selling process.”
Stephen Ward, Director of Strategy at the Council for Licensed Conveyancers stated:
“The Council for Licensed Conveyancers (CLC) is determined to support improvements to the home buying process. It is only through a number of changes – some of which are inter-dependent – that the process will get better for consumers and were pleased to see that yesterday’s government announcement reflected the scale of changes required.
“We support moves to ensure that customers are made aware of any potential referral fee by an estate agent before they make a decision on who to instruct, and that the should be encouraged to make greater use of review sites. Review sites are used, rated and increasingly trusted by consumers to guide their buying decisions. It is this route, rather than kite marks or additional quality standards beyond existing regulatory requirements which we believe will best support consumers in shopping around and lead to informed consumer choice.
“We recognise that there is significant overlap between the government’s announcements and the ongoing work in response to the CMA recommendations. We are already working with other regulators to ensure greater transparency and the provision of better information for consumers to guide their choice of a conveyancer.
“Similarly, we have been working with a range of providers as well as our regulated community for some time now to see how conveyancers can make use of digital platforms and other emerging technologies to drive innovation. We believe this is an essential part of improving the home buying process and one we will continue to support.
“At CLC we are committed to playing a leading role to help make the process of buying and selling of a home smoother, less stressful and more secure. We now look to the government to take a leadership role on this exciting agenda to help ensure that all stakeholders make progress together for the benefit of consumers.”
