Licensing and code of ethics urged to stamp out rogue estate agents

Licensing and code of ethics urged to stamp out rogue estate agents

Rogue estate agents are routinely ripping people off and breaking the law, and the government has failed to crack down on them, a consumer group said yesterday.

The Consumers' Association urged mandatory regulation of the £4bn estate agency industry after its research concluded that self-regulation had failed to stamp out cowboy practices.

A spokesman for the organisation said extensive research had uncovered evidence of criminal activity by agents and "shocking" levels of consumer concern. Widespread illegal practices were found, the spokesman said. They included estate agents giving preferential treatment to buyers who used their mortgage services, inventing offers to convince sellers to increase the sale price, and failing to pass on information about offers.

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Meanwhile a Which? survey of almost 2,000 households in England and Wales, revealed that about 70% of people felt estate agents regularly misled them. Only one in 10 people thought they could be trusted.

The Consumers' Association said that neither decades of bad publicity nor rising numbers of complaints had prompted the industry to reform. It urged the government to reject recent recommendations by the Office of Fair Trading that the industry be given another two years of self-regulation to resolve its problems. The OFT's proposals were "woefully inadequate", it said.

It also recommended an immediate review of the Estate Agents Act, saying that the legislation had failed to protect consumers.

The government should require that estate agents be licensed, have some sort of minimum qualification and comply with a compulsory code of ethics, it said.

Under the current system, anyone can, in effect, set up shop as an estate agent. No licence is required and no previous experience or knowledge of the law is needed. Membership of industry bodies such as the National Association of Estate Agents (NAEA), which have best practice guidelines, is not obligatory.

Only one-third of agents belong to a recognised trade body at all, meaning that thousands of consumers have nowhere to go for redress when problems arise.

Most consumers believe they are better protected than they actually are. Almost 70% of people in the Which? study thought there was an ombudsman who would deal with complaints about any estate agent, while 59% thought agents were compelled tosign up to a code of ethics.

And more than 40% of consumers believe agents must be professionally trained and qualified, none of which is the case.

Nick Stace, the director of campaigns at Which?, said: "Dodgy practice has left the public exposed to unchecked, often illegal, whims of rogue estate agents for too long. The OFT report wimped out of a perfect opportunity to protect long-suffering home movers.

"The government must step in and reject the OFT report."

The OFT said it stood by its report, in which it recommended some changes to the law to regulate rogue estate agents more effectively.

"We don't believe the Consumers' Association's views differ greatly from our views on this," a spokesman said. "We are both calling for the Estate Agents Act to be strengthened."

Peter Bolton King, the chief executive of the NAEA, said its members largely supported Which?'s conclusion that the OFT's recommendations "lacked teeth".

He said the NAEA had "consistently campaigned" for improved regulation, and that consumers who bought and sold through the association's members were protected under its own code of practice.

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