Shock as Ombudsman stops handling agency complaints - for now

One of the three government-approved redress schemes for estate and letting agents says it’s quitting the sector this year - but wants to propose an alternative system with just one Ombudsman for all of housing.

Ombudsman Services says it is to begin “a managed withdrawal” from the current schemes it operates for estate and letting agents as well as surveyors and managing agents, with a view to being out of the sector by August 8 this year.

Currently Ombudsman Services is one of three government-approved redress schemes; the others are The Property Ombudsman and the Property Redress Scheme.

The not-for-profit organisation, which already undertakes substantial redress activities in other sectors, instead appears to be gearing itself up to be a possible contender for a future when there may be only one redress or ombudsman scheme across all of housing.

Back in November the Housing and Communities Secretary Sajid Javid said the government would in early 2018 look at “bold options” to improve consumer redress across all aspects of housing - and that includes considering having one Ombudsman-style service for estate and letting agencies instead of the current three.

“This could help drive up standards across the whole industry and increase protections for consumers” Javid said at the time.

Now Ombudsman Services, echoing the government’s line, says it will work “with charities, consumer groups, property professionals and the public on a major report around the creation of a single housing ombudsman for submission to the Ministry of Housing, Communities and Local Government in the spring.”

OS says it envisages recommending a model similar to Javid with just one Ombudsman style service for the industry, and embracing agencies and many other disciplines within the broad ‘housing’ sector. 

OS says this is the model used in the finance and energy sectors - “an effective regulator supported by a single ombudsman and a strong advice and advocacy service for consumers” it says.

Ombudsman Services says it wants to consult with the public about the shape of the service, understand key ‘pain points’ for renters, tenants and home-buyers and predict potential demand.

“Redress in the housing sector is a really confusing picture for all involved. The patchwork of alternative dispute resolution and ombudsman schemes is a mystery to consumers and therefore is incredibly difficult for them to navigate” claims OS’s chief ombudsman Lewis Shand Smith.

“We are ceasing what we’re currently doing in the housing sector in a professional and planned way, because we believe it is not adding value.  Rather than continue to offer a broken solution to a broken market, we are stepping away to listen to what consumers actually want” he adds.

“We fully support Sajid Javid regarding the need for a single ombudsman for housing – only then will the housing sector be able to restore trust and ensure that consumers get a much better standard of service. Housing is one of the biggest issues we face as a nation and a fair, balanced, redress system will make sure that it serves the whole of society. We want to work to develop a model that works for everyone.”