According to Steve Roberson, director of Beechwood Estate Agents, the only way to root out the bad practices used by some estate agents would be to introduce a tough regulatory regime, akin to that employed by the FSA in the mortgage market.
Roberson, who has put his estate agency business on hold to concentrate on mortgage broking, said: “I’ve given up my business because the amount of malpractice I’ve seen. Some of the stories I’ve heard are also unbelievable. The industry needs to be totally cleaned up and the only way for this to happen is if the government brings in regulation, which will come down hard on some so the rest will fall into place.”
Roberson believed self-regulation could only go so far and an organisation like the FSA could come in as an independent regulator and enforce the laws.
He added: “From a regulation point of view, I can understand why it’s needed but if estate agents regulate themselves then they are not going to clamp down as hard.”
Many in the sector believe regulation is needed and the National Association of Estate Agents and Halifax Estate Agency have called for a compulsory licencing scheme.
Paul Fincham, senior media relations officer at Halifax, admitted FSA involvement was an interesting idea.
He said: “The estate agency process is not always within the mortgage process but it’s an interesting idea. Compulsory licencing will show whether an agent is competent and will be a common benchmark for training, quality and give a right to recourse.”
A spokesperson for the Office of Fair Trading, which oversees the estate agency sector, added: “In terms of regulation, we can punish an agent under the Estate Agents Act. However, if the regulation process was rolled into one, we may have issues over competition and agencies marketing themselves as one-stop-shops as this might discourage shopping around.”
