For the second time, former Director General of The Office of Fair Trading Sir Bryan Carsberg has been asked to help out the Royal Institution of Chartered Surveyors (RICS). In 2002 he was commissioned to investigate issues relating to valuations for the commercial property investment market. You may not yet have had time to read it!
In September last year he published a consultation paper, “Residential Property: Regulation, Redress and Competition in the 21st Century.” The paper set out comments and questions on the regulation of those providing residential property services and on residential transactions. The public, industry and Government were invited to respond. Today Sir Bryan publishes his report. In it amongst other things he says “I think that the markets for estate agencies, letting agencies and managing agencies are not working well because clients are not well informed about the qualifications of different agents and about what to expect from them in the way of service.” Strangely, amongst his 30 recommendations is one to effectively scrap Home Information Packs.
The outcome of the report is both predictable and as credible as a set of tatty sales particulars. The public didn’t know that the report was being compiled, the industry wasn’t interested and Government doesn’t seem too bothered in what RICS has to say since they torpedoed the introduction of Home Information Packs last summer.
The RICS represents over 140,000 surveyors world-wide but are shy about exactly how many residential estate agents are members. Their Press Office are still getting back to me to confirm how few they have. Most surveyors are busy doing structural surveys of buildings, counting bricks or providing professional services to the commercial property world. Chartered Surveyors are hard working, skilled professionals but most resent their public association with what they see as the grubby world of selling houses. Their monthly housing market survey is a triumph of PR spin over substance being based on the returns of just a sample of practicing estate agents – 7% of whom last month actually thought that they saw a rise in house prices!
It is probably not relevant that many younger estate agents snigger at the initials that follow the name of the President of the RICS
The review that Sir Bryan undertook included a road show around the country where interested parties could contribute to an overdue debate. Unfortunatley in at least one case it seems that the response was so poor that the event was cancelled. I managed to push my way past a dozen others who attended one consultation event in central London to find that even Sir Bryan didn’t attend – leaving the evening to be compared by an RICS sponsor.
According to RICS, “Sir Bryan received over 100 written responses”. This from a business where there are on average over a million sale transactions a year and when you add in rentals over 3 million people in the UK are ‘touched’ by buying, selling or renting property every year. The Ombudsman for Estate Agents resolved nearly 800 specific complaints in 2007 alone but having read his report it looks like Sir Bryan didn’t even bother to speak to him.
In his report Sir Bryan recommends that a Property Standards Board should be set up. Surprise surprise, the RICS and the National Association of Estate agents (NAEA), the co-sponsors announced last month that they would be setting up just such a body. Between them, RICS and NAEA represent less than 20% of all estate agents so it’s hard to see how two accreditation bodies can be expected to regulate and provide the public with a robust and effective code, let alone some form of redress system. Sir Bryan helpfully says “If legislation to require membership of a regulatory body is not quickly forthcoming, it would be beneficial for existing bodies to move ahead to establish a voluntary regulatory body and promote the benefits to consumers of dealing with agents who are members of that body.” So that will be the merits of dealing with their members would it?
Both RICS and NAEA provide an important function with a professional and respected training and qualification system but surely they and their Board are the last people to regulate and police the residential market and protect the consumer.
Which? the consumer organisation who have for so long pressed for improvements in the property sector and were once behind the introduction of HiPs for a while seems to have been taken in by the suggestion of a Residential Property Standards Board and to my surprise are quoted as supporting it. This Board has no plans to seek approval for a Code of Practice by the OFT although the Ombudsman has one. Which would you prefer?
What is needed is licensing of all involved in the industry. We need professional insurance for all individuals employed in it so that the public can be financially compensated if things go wrong. I’d like the trade bodies who have spent most of the past two decades squabbling over who thinks they represent the most agents to shut up and get back to playing their part in raising standards. This helps to make the process of selling or letting a property a simpler and more transparent process. One undertaken by qualified professionals.
The Ombudsman for Estate Agents should be left to handle complaints from the public without interference. The membership organisations should continue to raise the standards of qualification of those who are trained and a separate licensing body should provide a transparent and robust scheme that will provide the public with information on whom they are dealing with.
Sadly RICS has lost credibility with Government and is therefore largely ignored having humiliated the then housing Minister Ruth Kelly with an unprecedented legal challenge to the introduction of HiPs. The public, consumer organisations and those involved in the profession itself all want to see a more transparent property market. Let’s stop wheeling in well-meaning retired civil servants and grasp the problem by the throat. Even the current crisis in the housing market is blamed by some on estate agents – it must be clear to everyone that they are the last ones to regulate themselves.
The RICS are now looking to produce a responce to Sir Bryans’ report. Don’t be shy to tell them exactly what they should do with it!