Estate Agent Today understands that the Royal Institution of Chartered Surveyors wants to become a supervisory body under new laws attempting to combat money laundering.
The 4th European Anti-Money Laundering Directive, which came into effect from June of this year, gives individual EU member countries two years to implement its regulations through national legislation. So it must be enshrined in new UK laws by summer 2017.
The directive’s regulations, which applies to a range of businesses including property, applies to payments in and out of organisations for goods valued over €10,000. The regulations apply whether the payment is a single transaction or many linked transactions.
When this is enshrined in UK law, the directive as it applies to property will permit agents and some others involved in sales to be supervised within the industry by a designated body.
“Given our profession’s excellent track record in committing to and delivering self-regulation, we are delighted that the effective of proper self-regulation in raising standards has been recognised [in the directive]” EAT has been told by Luay Al-Khatib, RICS’ director of regulation for the UK & Ireland.
“RICS will shortly be formally applying to become a Treasury designated supervisory body for AML in the UK” he says.
Al-Khatib adds that this would be in addition to RICS’ existing work in “providing a framework of minimum standards and related guidance for members on how to deal with suspicious activity.”
Meanwhile there is still no news from RICS or the National Association of Estate Agents on their separate investigations into specific allegations and comments in Channel 4’s From Russia With Cash documentary, broadcast last month.
The programme followed a ‘politician’ - supposed to be a Russian government minister - to see how agents reacted to a plan to use millions of pounds of stolen money to purchase high end property in the capital. In the programme there were instances of estate agents allegedly recommending law firms to help a buyer hide his identity.
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Is RICS going to be as efficient in supervising anti-money laundering as they are in producing a report on From Russia with Love? How long does it take? Heaven forbid that they should delay it to protect any of their members.
This must not happen. The RICS is only a small part of the the Sales, Letting and Management of the real property industry. (The clue is in the title) They have wanted to control the whole industry with their restrictive practices for many many years. Any 'supervisory' body must be truly independent.
HOW To Get The Housing Market Operating Fairly Again:
Sadly, it's not just about a problem with money laundering that's causing the majority of the UK housing market sales turnover to stagnate.
The rate of turnover in the housing market is crippled by its own marketing methods and not by an insufficient potential supply of properties available to sell - or indeed by a lack of people wanting to move house. This is causing severe financial pain in the agency sector, though few practices appear prepared to admit this. The market needs to be improved so that it can start operating fairly in order to encourage the house-owning public to feel comfortable about moving more often. Until this happens, both buyers and sellers will continue to shrink away from starting to transact any more than the minimum numbers of sales, the only exceptions necessarily being primarily the three Ds – debt, divorce and death.
Specifically, families or the people forming them would clearly prefer to move house more often than around every 20 years on average - as is happening currently! This stark statistic, (source: http://www.propertychecklists.co.uk/articles/no-one-wants-to-move-home-anymore) in itself, clearly shows that there is now a serious problem.
In my opinion it has resulted in the market continuing to 'stagnate', in terms of there being a lack of sufficient properties going on sale - at prices that are reflective of people's ability to actually afford them. Money laundering is only the tip of the iceberg when it comes to inefficiencies in the services currently operating the housing market itself.
If marketing methods for houses going up for sale were successfully improved, more properties would start going on sale and more activity in the marketplace would start to ensue. I can only place the blame for this failure firmly at the door of estate agency and the methods employed by those in it.
What needs to be done is to have a wholesale review of house marketing processes, and for appropriate change to happen swiftly, once the relevant improvements are decided upon.
If the NAEA and/or RICS cannot proactively achieve this then, again in my view, government needs to intervene to initiate the necessary market upgrades a reasonable time-scale. This market is a very important sector within the whole economy and as such it warrants government scrutiny.
For more information about what I believe needs to be done, as well as the how, the why, and the when, please refer back to the article which was published on the Property Match Blog some while before the last general election.
http://www.property-match.co.uk/blog/2013/12/05/estate-agents/want-functional-stable-housing-market/
This has been recently updated and gives considered details for resolving both supply and price inefficiencies identified within the UK housing market currently.
If anyone has a question about an aspect of these proposals they are welcome to communicate this with a view to discussing it with me in a timely and measured way of course. I'm afraid cannot enter into short-fire stoic and opinionated debates concerning such important matters on this site. A more calm and measured approach would be needed to deal with this on-going, intransigent problem needing an appropriate solution for the whole UK housing market. Any interested parties may contact me on the Property Match blog on this.
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