Regulation

Estate agents must hold qualifications and reveal broker referral fees under new rules

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9th April 2018
"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."

The government has introduced new measures to 'professionalise the estate agent market, drive up standards and bring an end to rogue managing agents'.

Housing secretary Sajid Javid announced yesterday that estate agents will now be required to hold a professional qualification and must be transparent about the fees they receive for referring clients to solicitors, surveyors and mortgage brokers.

The government says complications during the homebuying process "cause unnecessary financial and emotional stress to customers" and lead to over a quarter of house sales falling through annually.

Its research found that more than 6 out of 10 buyers and sellers have experienced stress, and around a quarter of sellers said they would use a different estate agent if they were to go through the process again.

Other measures introduced by the government include encouraging the use of voluntary reservation agreements to help prevent sales falling through and crack down on gazumping, and setting a timeline for local authority searches so buyers get the information they need within 10 days.

It will also strengthen the National Trading Standards Estate Agency Team so they can carry out more enforcement activity which includes banning agents

Additionally, a working group will be set up to bring industry and partners, such as HM Land Registry, together to look at developing innovative digital solutions to speed up the home buying and selling process.

Guides on how to buy and how to sell will be developed and published, aiming to ensure customers are better informed of the process and know what questions they should be asking.

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."

Mark Hayward, chief xecutive at NAEA Propertymark, commented: "We particularly welcome the commitment to further regulation - we have long argued that estate agents should be recognised as professionals, this is an important step towards achieving this and we look forward to working with the government."

Founder and CEO of Emoov Russell Quirk, added: "For far too long the estate agency industry has got away with providing below par standards to the determent of those it is supposed to support and serve. Hopefully, these new regulations will go some way in raising the bar and compelling those operating below it to get their house in order.

"The current process is outdated and works in favour of the agent not the consumer and this simply isn't good enough when you consider the financial commitment required throughout the process.
Home buying and selling must be improved and by increasing the speed of a transaction, with the addition of a higher degree of certainty and stability, fewer sales will collapse, less money will be wasted and there will be less stress for buyer and seller alike.

"We've been working with the Land Registry, Nationwide and the Law Society to name but a few, as part of the Ministry of Housing Culture and Local Government, to provide guidance and advice on how to better the UK home buying and selling process. One area we’ve highlighted that is in dire need of improvement is the lack of regulations and qualificational requirements and so we are vehemently in favour of licensing agents and delighted to see this change in the industry."

 

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