Housing Secretary The Rt Hon Sajid Javid (8 April 2018) announced new regulations to professionalise and weed out the ‘rogue agents’.
Unlike so many other westernized countries, the UK still allows anyone to operate unregulated as an agent. There are some safeguards you can look out for to show that some NATIONAL TRADING STANDARD involvement/regulations like ARLA, or PRS as we use. In some cases they provide training so you can then credit your name or business with their name/logo, or in others it allows a public platform for you or your business to be commented, reviewed & regulated.
According to government research, quoted here from the BBC & GOV.UK, there are approximately 20,000 estate agencies across the country, and currently anyone can practice as an estate agent. The new rules outlined below should help regulate the industry and give more power, staffing & funding to ‘National Trading Standards, Estate Agency Team’ to crack down and terminate the ‘rogue agents’.
The rules would stipulate that agents and management companies must be required to hold a professional qualification and declare fees received from referral’s (aka ‘back handers’) be it mortgage brokers, surveyors etc. While this is normal practice in business, it’s good to make your clients aware of the details of your relationship with said referral.
Also stated from the Ministry of Housing, Communities & Local Government;
- Encouraging the use of voluntary reservation agreements to help prevent sales falling through and crack down on gazumping.
- Setting a timeline for local authority searches so buyers get the information they need within 10 days.
- Requiring managing agents and freeholders to provide up-to-date lease information for a set fee and to an agreed timetable which will end the current situation where leaseholders are at the mercy of freeholders and their agents
- Strengthening the National Trading Standards Estate Agency Team so they can carry out more enforcement activity which includes banning agents.
Buying a house no matter the agent you are dealing with in most cases will be the biggest expense of ones life, which carries a lot of weight and emotion. Currently long waits and uncertainty can surround this process for both the buyer and the seller. New rules will stipulate lock in agreements, and attempts to eradicate ‘gazumping’ (to make a higher offer for a house than (someone whose offer has already been accepted by the seller) and thus succeed in acquiring the property.
Housing Secretary Sajid Javid said:
‘Buying a home is one of the biggest and most important purchases someone will make in their life. But for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.’
‘So we’re going to put the consumers back in the driving seat. We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.’
Some of the larger High Street agents have been lobbying to get better regulation and insisting on qualification for estate agents. Not only in an attempt to then be taken more seriously and assure their clients and customers, but also to stamp out the independent agents bringing more business to themselves. However with the rise of Online Agents and DIY models, by the time the high street agents are sorted, and the rogues removed a new wave of issues will likely be appearing online, and new methods of monitoring and authenticity will be required.
A guide on “how to Buy’ and ‘How to Sell’ will be published to better educate buyers and sellers on the various pitfalls and hopefully then legal requirements outlined above. We can’t currently find a timeline for these regulation but will keep you posted with any new findings.
Thank you for reading.