The Office of Fair Trading (OFT) is to begin an inquiry into claims that estate agents have been profiteering from the housing boom.
The aim of the study to is to see whether fees in the £4.6bn sector represent good value, and whether the Estate Agent Act is working sufficiently to protect consumers ‘ both buyers and sellers ‘ and if not, to propose ways in which any shortcomings could be remedied.
There are signs of increasing concern from consumers with the service they receive from estate agents. The Ombudsman for Estate Agents received over 5,500 complaints from members of the public in 2001 ‘ a 25% increase over 2000.
While welcoming the announcement, Hugh Dunsmore-Hardy, chief executive of the National Association of Estate Agents (NAEA), said: ‘The inquiry must look at the business environment and the processes within which estate agents are required to operate, and take proper account of their duties and responsibilities to their seller clients.’
He added: ‘There is a well-regulated framework within which estate agents are required to work. However, the NAEA would like to see stronger enforcement measures and is already working to encourage higher standards of professionalism within the industry.’
Issues the inquiry will cover include fee structures, the nature and effectiveness of competition, how well the Estate Agents Act is working and a comparison with Scotland and other countries.
As an organisation that works closely with estate agents, the Royal Institute of Chartered Surveyors (RICS) also welcomed the announcement.
‘The public needs to have confidence when they go to an estate agent. We think the market should be more regulated than it is to improve standards and protect the public,’ said Ray Barrowdale, spokesman for RICS.
‘One of the problems with the estate agency sector is that standards vary so much. The fact the public thinks all estate agents are cowboys, which is far from the case, shows the industry can do a lot to improve its image,’ he added.