The government is introducing new measures to professionalise the estate agent market to crackdown on ‘rogue managing agents’.
There are approximately 20,000 estate agent businesses across the country and, currently, anyone can practise as an estate agent. But under the new rules, estate agents will be required to hold a professional qualification and be transparent about the fees they receive for referring clients to solicitors, surveyors and mortgage brokers, with the aim of improving standards.
The government says the changes will professionalise the sector and create a more trustworthy and reliable industry that will be better held to account.
Additional proposals include:
· encouraging the use of voluntary reservation agreements to help prevent sales falling through and crack down on gazumping;
· setting a timeline for local authority searches so buyers get the information they need within 10 days;
· requiring managing agents and freeholders to provide up-to-date lease information for a set fee and to an agreed timetable to end the situation where leaseholders are at the mercy of freeholders and their agents; and
· strengthening the National Trading Standards Estate Agency Team so they can carry out more enforcement activity, including banning agents.
With around one million homes bought and sold in England each year, government research shows 60% of buyers and sellers have experienced stress during the process and around a quarter of sellers stated they would use a different estate agent if they were to go through the sale again.
Housing secretary Sajid Javid says: “Buying a home is one of the biggest and most important purchases someone will make in their life. But for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.
“We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.”
Paula Higgins, chief executive of Homeowners Alliance, adds: “These will go a long way to bring more certainty for homeowners and help stop sales falling through. In an industry tarnished by Wild West attitudes, these reforms will send the cowboys packing”.
Meanwhile a working group will be set up to bring industry and partners, such as HM Land Registry, together to look at developing digital solutions to speed up the home buying and selling process.
Mark Hayward, chief executive of NAEA Propertymark, comments: “We have long argued that estate agents should be recognised as professionals; this is an important step towards achieving this and we look forward to working with the government.”
Christian Warman, director of central London estate agency Tedworth Property, adds: “Voluntary deposits to prevent gazumping are always a source of debate - they are sometimes used nowadays, but often an inordinate amount of time can be spent determining the terms of the initial deposit, so it would be good to have this standardised.”