17 Dec RICS calls for the compulsory regulation of estate agents.
With the property market now gradually opening up to first time buyers, worryingly, almost a third of buyers admit they do not have a good understanding of the process when making the biggest purchasing decision of their lives. Furthermore, almost 80% believe that compulsory regulation of estate agents would ensure that consumer understanding improves.
Since the government’s various initiatives to assist buyers have been introduced, an increase in accessible mortgage products has led to an upturn in activity across the country with more first time buyers now able to get a foot on the ladder. Worryingly, however, 29% claim they did not have a good understanding of the purchase process when buying their home, and 30% also claim that their agents failed to even advise them on their transaction.
With no statutory regulation in place to ensure agents are suitably qualified to sell property, and with public understanding at such a low level, understandably, the majority of first time buyers (77%) believe that consumer understanding would improve if compulsory regulation was introduced.
Agents who are not members of a professional body are not obliged to meet minimum competency standards or be regulated against them. This means that consumers are potentially dealing with an agent who, while technically abiding by existing legislation, could be providing inaccurate advice.
With the market now seemingly over the very worst, more needs to be done to ensure agents understand what they are doing when it comes to the complex procedures involved in the selling process and advise their clients accordingly. RICS would like to see all estate agents required to sign up to a professional regulation scheme that ensures consumers are dealing with an agent who is suitably qualified to broker their sale and advise on the processes involved.
When making the biggest purchase of their lives, it’s important that buyers – and especially those who haven’t been through the purchase process before – understand precisely what is involved. This is particularly relevant now, with the market now seemingly over the worst and more first time buyers are in a position to make a move.
By using an unregulated estate agent, people are potentially dealing with someone who doesn’t understand the technicalities involved in buying a home or their obligations to consumers. I would recommend that anyone who is buying or selling a house checks that their agent is a regulated member of a professional body such as RICS, and has met minimum standards of competency and understanding.
Peter Bolton King, RICS Global Residential Director
First time buyer responses
93% believe agents should have to meet minimum competency standards before practising
23% claim their agent didn’t demonstrate an in-depth understanding of the sales process
30% claim their agent didn’t offer advice on the transaction process
53% claim their agent didn’t make them aware of the difference between a survey, appraisal and valuation
89% believe buyers would be better protected with compulsory regulation
ComRes interviewed on behalf of RICS 1,017 UK adults online between 9 and 15 August 2012. Respondents had either bought a property, or had gone through the process of obtaining a valuation on a property they were looking to buy, in the last five years.
ComRes is a member of the British Polling Council and abides by its rule