Estate agents remain unregulated

The Office of Fair Trading (OFT) has given estate agents the thumbs up, and concluded that they will not be liable for greater regulation, after a year-long enquiry into the sector and its practices.

Today’s report concludes that estate agents generally work in the public’s best interest and that official regulation is not required.

The OFT has spent a year investigating the process of buying and selling property in the UK, looking at price competition between estate agents and the service levels they provide.

Its conclusion that no regulation is needed has been derided by consumer groups and estate agent trade bodies alike, who want to see the sector improved.

Currently anyone can set up as an estate agent, with no qualifications required. They typically charge between 1% and 3.5% of a property’s sale price for their services, although a number of ‘virtual’ agents with no offices now offer fees as low as 0.1%.

Peter Bolton King, the chief executive of the National Association of Estate Agents, says:

"Once again the OFT has categorically failed to see that better regulation of the homebuying and selling market is required.

“Buying a home is often the largest single transaction of a person's life and it is disappointing that the OFT has not thought it appropriate to acknowledge that a robust and appropriate level of consumer protection is needed."

He said the OFT's decision contrasted dramatically with the views of the Department for Communities and Local Government, which is introducing full regulation of lettings agents.

"This inconsistency is very difficult to understand given that the same agents and firms often deal with sales and lettings.

“The NAEA would like to see a more regulation to ensure that professional, qualified estate agents are not confused with those who fail to meet the basic professional standards we would expect from our members.

“The need for consumer protection in the form of a more professional industry is the driving force behind our plans to introducing a licensing scheme for our members later this year."

This was the second investigation into estate agency in the UK in six years. In 2004 the Royal Institution of Chartered Surveyors accused the OFT of "bottling out" after it stopped short of imposing legislation on the profession.