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Last Updated: Thursday, 22 July, 2004, 10:58 GMT 11:58 UK
Q&A: Estate agents and you
a semi detached house

The government has outlined plans to reform the rules governing estate agents. BBC News Online examines the Department of Trade and Industry's conclusions and what rights you have with estate agents.

What has the DTI said?

More than nine out of 10 people buying and selling a home in England and Wales use an estate agent: the industry is worth an estimated 2.5bn annually.

But anyone can set themselves up as an estate agent and play a crucial role in the most important purchase most people will ever make.

Under new proposals, estate agents will have to join an industry-wide ombudsman scheme.

Failure to join the scheme could lead to firms being banned, the DTI says.

In addition, agents will be required to keep written records of all sales.

But Consumer Minister Gerry Sutcliffe has ruled out licensing of estate agents on the grounds that it could deter good estate agents from setting up businesses.

The DTI's proposals follow a critical report from the Office of Fair Trading, the UK's trading watchdog, and are a response to growing complaints about the activities of some estate agents.

How widespread are complaints about agents?

During 2002 the industry ombudsman saw complaints rise by 16%.

The majority of complaints from sellers involved disputes about fees and dissatisfaction with the agent's financial evaluation of a buyer's ability to purchase the property.

There were also doubts about the initial valuation of the property.

Most complaints from the buyers' side were that sales literature inaccurately described the property or that their offer had been unfairly handled by the agent.

What is more, the complaints received by the ombudsman could be the tip of the iceberg: only one-third of estate agents are members of the scheme.

What did the OFT conclude?

The OFT inquiry, which took nearly two years, focused on fees, competition and how well the 1979 Estate Agents Act, which governs estate agents' behaviour and the transaction process, is working.

The OFT said that there was not enough competition over fees in the industry.

The watchdog focused on the widespread use of fixed "pricing points", with the majority of fees being set at a quarter-point increments between 1% and 2%.

The OFT concluded that there was general dissatisfaction with the day-to-day performance of estate agents.

According to an OFT survey, one in four recent sellers said they were dissatisfied with the service they received from their estate agent, citing poor value for money, delays in the sale and inadequate communication.

What happens next?

The DTI proposals will be put forward for consultation in the autumn.

Some changes could be enacted by amending the Housing Bill, currently going through parliament.

How can I protect myself if my agent lets me down?

An individual's right to redress about their treatment depends on whether an estate agent is a member of a scheme.

The Royal Institution of Chartered Surveyors and the National Association of Estate Agents operate internal complaints procedures.

The Ombudsman for Estate Agents offers a complaints service for its member agencies.

But the current voluntary scheme covers only one-third of agents.

The ombudsman can award compensation of up to 25,000 for breaches of its codes, although many awards are for much less.

The ombudsman publishes a list of members on its website.

Where else can I turn?

If a buyer or seller believes that an agency has failed to meet its obligations they could complain to their local trading standards department.

The OFT can also issue warnings and banning orders if it has sufficient evidence of a breach of law.

Further information:

The OFT has a free booklet, called "Using an estate agent", which is available from its website or by calling 0870 6060321.

The guidance covers England, Wales and Northern Ireland.


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