Will new plans curb rogue estate agents?

Last week the government revealed its intention to crack down on rip-off estate agents.

Speaking at the Labour Party Conference in Brighton last Monday, Alan Johnson MP, Labour’s secretary of state for trade and industry, pledged the government would introduce new powers to tackle rogue estate agents. Under the plans, agents who rip off consumers risk a 25,000 fine from the Estate Agents Ombudsman.

So, Mortgage Strategy asks: “Has the government gone far enough with the latest deterrent against malpractice by estate agents?”

James Rodea, Cluttons
The new deterrent won’t have any impact on Cluttons as we are a professional company with trained estate agents. But it always surprises me that anyone can set up business in this industry and start trading with little knowledge or skills. One-man bands can get away with murder because they aren’t regulated. But the deterrent fine isn’t large enough. When you consider that the average property price in London is 350,000 and most estate agents charge 2%, say 7,000, the fine is only worth four or five deals. What is needed is more regulation in line with brokers so that the market is made more professional.

Rupert Sebag-Montefiore, Savills
Any estate agent who has the best interests of the industry at heart would want to see rogues drummed out, and higher penalties on offenders should be welcomed. The government lost a big opportunity to license estate agents following the recent Office of Fair Trading report and there is an argument for having a minimum qualification for those dealing with what is people’s most valuable asset.

John Wriglesworth, Hometrack
I support anything that can be done to protect the consumer, especially in an industry where rogues bring industry standards down and give law-abiding agents a bad name. Increasing the fine is definitely a step in the right direction but consumers will only begin to trust estate agents if stricter controls and more rigorous training are enforced.

Paul Smith, Haart Estate Agents
We have consistently campaigned for the improved regulation of estate agents. We welcome the government’s renewed commitment ‘to take new powers to tackle rogue estate agents’ and fines are certainly one measure that will ensure non-complying agents are suitably penalised. Haart adheres to its own code of conduct and is also a member of the Ombudsman for Estate Agents.

Peter Bolton King, National Association of Estate Agents
There is no statutory requirement for a person to register or become qualified to set up as an estate agent. This will make it difficult for the government to identify rogue elements that are generally not linked to any professional body. The NAEA has been lobbying the government for years to introduce licensing which it refuses to do on the basis that it is anti-competitive. Before being admitted to membership of the NAEA, candidates have to prove competency by passing the Technical Award. They also have to agree to abide by the association’s Code of Practice and Rules of Conduct and, where necessary, have to meet compulsory insurance requirements.