A previous version of this story had an image in which two estate agencies could be identified. To be clear, the image was sourced from a licensed third party resource, there is no inference between the headline and the professionalism of these agencies. Today’s Conveyancer has apologised to both agencies for any upset caused.
Estate and property agents are to be regulated under plans announced by the government this week.
A statement from the Ministry of Housing, Communities and Local Government (MHCLG) confirmed plans to introduce independent regulation of property agents ” as soon as possible.”
Regulation of Property Agents was outlined in the government’s response to the home buying and selling consultation published in June. The consultation revealed support for “licensing or wider regulation of estate agents” with the roadmap going on to say the government would “consider Lord Best’s recommendations and wider options to increase standards and consumer trust, setting out our full position on the regulation of estate, letting and managing agents in due course.”
Now the government has confirmed agents will be required to obtain a license to do the job, as well as appropriate qualifications to operate. A regulator would set codes of practice, including standards of conduct and proper complaint handling for those they regulate, with the power to take away licenses in the event of non-compliance.
In her Labour Party Conference speech housing secretary Angela Rayner said there were many examples of estate agents, letting agents and property management exploiting leaseholders and tenants. It was, she said, a sector with “many decent businesses… undermined and undercut by far too many cowboys, crooks and con artists” with homeowners, renters and leaseholders paying the price. Rayner went on to say: “Unqualified, unlicensed and unregulated agents are taking thousands from their clients and mishandling their money. With no transparency or accountability, vultures can take advantage. At my brief time as a backbencher, I said this was a problem. I wish that I had the chance to tackle and urged the government to act. Now, under this prime minister, I’m proud to do so myself. Conference we will legislate for an independent regulation to reign these cowboys in. They will be required to follow the rules and if they don’t, their licenses will be taken away.”
The announcement comes as the government said they plan to introduce a cap on fees leaseholders and those living on freehold estates can charge for administrative fees and permission fees. The current system, where permission may need to be sought for keeping pets, provides “no certainty of the costs and no clear oversight of the process. ”
A public consultation on the scope and level of fees will be launched, with legislation to follow that ensure caps are “genuinely reasonable.”
The statement concludes the measure will “fundamentally rewire homeownership, whilst supporting over 5 million existing leaseholders and future homeowners, who will benefit from stronger control, powers and protections. The government is committed to bringing forward these changes as soon as possible and will set out more information in due course.”
One Response
There is an irony here. Some in the agency sector have been among the loudest voices for radical reform of conveyancing. Reform has proved double-edged. A government in an interventionist mood has now turned the spotlight on the agents themselves, and on practices said to exploit the public and undermine the integrity of homebuying. The Housing Secretary spoke of people being “tricked” into overpriced in-house services and caught by hidden fees.
That mood did not arise in a vacuum. Last year’s BBC Panorama investigation alleged that buyers who took an agent’s in-house services were favoured over others. The businesses concerned denied treating customers unfairly, and that should be recorded. But the public conversation has moved on, and regulation is the result.
For conveyancers, there may be an upside. If the code and licensing regime bite, we may see the worst abuses around reservation agreements curtailed, and referral fees and kickbacks that steer clients towards a particular conveyancer phased out or banned. The statement does not yet say so, and the detail will decide it.
Regulation done well protects consumers and honest agents alike. The test is what the code says and how firmly it is enforced.
The devil is always in the detail.