Assetz® News - New oversight wont stop "day light robbery" estate agents, says Which?

New oversight wont stop "day light robbery" estate agents, says Which?

16th September 2005 |

Crooked estate agents are holding homebuyers to ransom because the Office of Fair Trading is not regulating companies tightly enough, consumer affairs magazine Which? has warned. Which? criticised the OFT for backing the Ombudsman for Estate Agents (OEA) code of practice, which the magazine said is not tackling issues of concern.

Of particular concern is way the OEA examines estate agents, relying on customer satisfaction surveys that Which? says are not effective in dealing with collapsed sales. They are also ineffective when property investors and home buyers are unaware that estate agents are bending the rules, says Which? who has called for more 'mystery shopper' inspections and random checks.

"Since 2003 and as recently as May this year, Which? referred to the OFT particular problems with the way the OEA, as an organisation, monitors its members," Which? head of campaigns told This is Money.

"If an estate agent is handing a customer a form once a sale has been completed then they are likely to be satisfied with the service, but what about those sales that didn't happen for whatever reason? There's still a problem of non-disclosure in the industry, where agents fail to pass on an offer in writing, and conflict of interest in the industry," she added.

Only 40 per cent of estate agents are currently regulated by the OEA, but this is set to grow to around three quarters in early 2006 as the National Association of Estate Agents (NAEA) makes OEA oversight compulsory for all its members. The NAEA is currently negotiating with the government over establishing an independent compensation scheme over agent mis-selling.

A Which? investigation earlier this year found that agents were commonly over and under valuing property, sometimes by as much as £125,000, or 25 per cent of the house price. Agents would 'tout' for business with deliberate over evaluation, before pressuring sellers into a low price to gain a quick sale, Which? found.

OEA chair Bill McClintock insists that the changes mark a substantial step forward. "This is a big step forward for the consumer as it means they will have free access to independent redress when using OEA estate agents who will have to adhere to a strict code of practice," he said.

Which? remains unconvinced however, and says the new rules will go nowhere near far enough to prevent agent abuses. "The current consumer protection system is hopelessly ineffective and allows rogue estate agents to get away with daylight robbery," said Which? editor Malcolm Coles after the magazines earlier investigation.

"For two years Which? has been demanding that all estate agents are members of an independent redress scheme. This new government must put legislation in place to protect consumers when making what is often the biggest purchase of their lives," he added.