I declare an interest as Chairman and Chief Executive of an Insurance Broking and Independent Financial Advisors organisation. I have lectured and written on insurance and financial services subjects. I have been involved with arrangement of mortgages and have dealt with Estate Agents.
In regards to my business both the financial services and the general insurance activities are authorised and regulated by the Financial Services Authority. This encompasses not only licensing but procedures relating to redress and dispute resolution
I broadly welcome the Consumers, Estate Agents and Redress Bill. Buying or selling a property is likely to be the most significant transaction in most peoples' lives and can involve a great deal of stress and anxiety. In view of this, the consumer needs assurance that the market is a transparent one. Estate agents play a critical role in the housing market, with over 90% of people buying and selling a house through them. Most estate agents are honest, although sadly a few rogue estate agents give the rest a bad name.
I believe it is vital for the good of the industry that there is seen to be a code of practice behind any redress scheme approved by the Office of Fair Trading which ensures universal high standards and encourages transparent and effective practice within the industry. It also needs to send a clear message to those small numbers of estate agents who do not live up to their highest expectations.
Professionalism, the raising of standards and the need to protect consumers are matters vital to estate agency. It has been seen by some as a slightly shoddy profession on occasions because of a lack of a single set of standards. I welcome the compulsion for all agents to belong to a redress scheme - but concur with my Noble Friend that there needs to be a clear set of standards that all schemes adhere to. There is a voluntary ombudsman scheme for estate agents, the Ombudsman for Estate Agents (OEA), but only about 66 per cent of estate agents are members. If the agent does not belong to the scheme the only remedy currently available to a consumer is seeking compensation is through the courts - expensive and time consuming.
The single code of practice should help to give the profession a better image. A "Which?" research from June 2006 showed that over eight in ten people think the Government should set up an independent body to deal with complaints about estate agents, while a March 2004 Office of Fair Trading found a quarter of sellers were dissatisfied with the service provided by their estate agents. Some 21 per cent of sellers and 23 per cent of buyers said they had experienced a serious problem with their agent, such as:
failure to pass on offers,
suggestions that a buyer would be more likely to be successful if they also used the financial services offered by the agent,
and failure by the agent to declare a personal interest.
Of these, 71 per cent of sellers and 55 per cent of buyers complained. In the majority of cases, nothing happened or the complaint was not resolved satisfactorily.
Consumer dissatisfaction with estate agents is increasing. In 2005, the OEA received 6,021 complaints - a 35 per cent increase on the number received in 2000. This represents about one complaint for every four estate agents.
That, surely, would suggest that a single system of redress should cover all estate agents, should be seen to set high "best practise" standards and should be seen to have real teeth.
