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In an unprecedented move a consumers association has demanded that the government reject the recent Office of Fair Trading's (OFT) recommendations and license estate agents to protect home-movers.
The OFT's two-year investigation acknowledged there was unhappiness with the current system, but did not recommend licensing. In response this week, the Consumers’ Association Which? launched a campaign on estate agents in order to get the government to regulate estate agents.
Which? is calling for the regulation of estate agents to be mandatory and says the government needs to undertake an immediate review of the Estate Agents Act. The present legislation is unenforceable, the association says, leaving consumers at the mercy of untrustworthy estate agents, who earn £4 billion in fees per year from property (an average of £2,100 per transaction).
Now the Council of Mortgage Lenders (CML) has joined in support of the Which? campaign. CML Director General Michael Coogan said:
"In an environment where everyone else involved in the transaction will be regulated - the conveyancer, the surveyor, the broker, the mortgage lender - it is ironic that the estate agent, who is in many ways the most important player in determining the outcome of the house sale, is the only professional who does not have to meet stringent, compulsory standards.”
"This situation cannot be right. As mortgage lenders, we know that most of the time people are much more interested in their actual house purchase or sale than they are about the mortgage, or the other associated services. Regulation is necessary to separate the wheat from the chaff in a sector whose standards are at present too variable."
More than nine out of 10 people buying and selling a home in England and Wales use an estate agent and many think that estate agents are untrustworthy. Regulation would likely correct this view.
- According to research by Which?, only about one in 10 home buyers and sellers believe that estate agents can actually be trusted.
- Seven in 10 people think estate agents frequently "massage" information about properties and work together to line each other's pockets.
- More than half think that estate agents frequently invent offers from non-existent buyers.
Currently there is nowhere that the public can go for independent, trustworthy information on the home-buying process. So, to help home-movers protect themselves against rogue estate agents, Which? has set up a dedicated website www.which.co.uk/moveit. The site offers tips on how to get the most out of estate agents and warns of the problems consumers often encounter. The website also invites consumers to share their experiences of estate agents.
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