Ten days ago the OFT offered advice to ‘consumers’ about avoiding internet scams on Valentines Day. Today they have published their investigation into estate agents and the report looks similarly impotent.
Since their last report four years ago a much higher proportion of those that use estate agents (who are not letting agents of course) find their services satisfactory. Today’s OFT report suggests that contrary to public perception, estate agents generally serve the public well although it goes on to encourage ‘consumers’ to look at alternative ways of buying and selling property.
Letting the public feel that Internet sites and For Sale By Owner businesses that should offer Genuine competition call themselves ‘Estate agents’ is a retrograde step that is likely to lead to muddle and confusion.
It remains to be seen what time-scale the OFT have in mind for all this but if legislation is required we may be as far away from improving the image and experience that the public has of estate agents as we ever were.
Sadly, whilst actively encouraging the public to embrace the new internet-based business models (perhaps like the Tesco offering or Sarah Beeny’s Tepilo.co.uk) the OFT has missed the opportunity to clarify the 1979 Estate Agents Act and to include on-line services and so called ‘For-Sale-by-Owner’ businesses that are currently not bound by regulations such as The Property Misdescriptions Act. This leaves those who don’t transact with an estate agent more vulnerable to expensive mistakes and more worryingly precludes any chance of redress if something does go wrong.
Whilst the industry has been pressing for licensing Government appears to be unconvinced. The OFT seems to suggest that all is well and makes no case for licensing. It had been hoped that they would at least support those who seek to bring in self-regulation.
The report also raises concerns about who the OFT and similar ‘consumer focused’ bodies regard as ‘consumers’ and a fundamental misunderstanding in the minds of the public as far as on who’s behalf an estate agent is acting.
In their preliminary report published in November, 52% of buyers thought that the agent they dealt with was acting on their behalf as well as the seller. It’s no wonder that some folk feel let down!
It’s also not clear just who ‘consumers’ are supposed to be. Organisations like the OFT who poke about in the property sector often describe house buyers and tenants as consumers. Surely it is those who pay estate and letting agents who are the consumer. Buyers and tenants should of course expect to be treated fairly but in the adversarial system that we have in the UK (unlike say Notaires in France) it is always going to invite confusion if you try and lump everyone together.
The OFT have not helped their standing with agents following their apparent Data Protection blunder at the weekend in openly sending an email to over 450 anti-money-laundering officers revealing their email addresses (of which I was one) and their insistence on having their own separate money laundering register at huge cost to the industry when it has one of it’s own.
Finally, it would perhaps have been better for the OFT to have spent some time looking into the scandal of Landlord and Tenant monies and the time bomb of rent deposits. Can it be fair that the 80% of estate agents who are now involved in lettings appear in some case use their clients money as working capital?
The Property Ombudsman service set up by the industry 20 years ago and now a mandatory requirement for all agents seems to have done more for both the public and for the industry than either the OFT or the other raft of other reviews into home buying and selling. After the General Election we can expect whoever wins to take an axe to public spending and I’d guess that there will be some who will suggest that we should make a start with the Nanny state.