Professionalising the estate agency sector – how long could this take?

As housing market stakeholders we’ve all had a month or so to try and digest the government’s own response to its call for evidence on the home-buying process. 

The measures, proposals and (dare I say it) ‘suggestions’ in order to secure major improvement have been well-documented and it won’t need me to tell the estate agent fraternity what its plans are for it, in terms of ‘increased professionalisation’.

There are few, if any, sectors untouched by the government’s plans and we will all have to come to terms with the – in our view welcome – news that much will change over the (hopefully) the short-term. 

One of the big questions to come out of the call for evidence response is around time: just how much time will be given to all sectors of the housing market in order to either put in place the statutory measures or to meet the government’s expectations?

At our recent All-Member’s Meeting (AMM) we were lucky enough to have Matt Prior from the Ministry for Housing, Communities & Local Government (MHCLG) talking about the process, the measures they have come up with and what it might expect from stakeholders. 

He was specifically asked about timescales, especially in light of the seemingly sharp difference between areas where the government is going to enact specific legislation and those where the focus seems to be on ‘encouragement’ rather than making any mandatory changes.

I don’t think there’s any doubt that the government’s view of ‘encouragement’ is slightly more formal than some parties might be anticipating. While in areas such as leasehold, for example, we do have specific proposals that will be enacted into law and therefore, managing agents/freeholders/Lease Administrators are going to have to deal with set fees and charges for their services and commitments to deliver the necessary information to the interested party within a specific timescale.

However, there is no such ‘mandation’ in other areas – which I might add left the Conveyancing Association (CA) feeling a little disappointed although we acknowledge the MHCLG might wish to take a more ‘suck it and see’ approach in certain areas – and instead we have the oft-used phrase of ‘the industry is encouraged to...’ This encouragement extends to, for example, the greater use of reservation agreements, purchasers securing a mortgage decision-in-principle before an offer can be put in, ID verification, and perhaps the introduction of a Property Log Book. All developments which the CA would eventually like to see have a more mandatory spin put on them. 

But, asked at our AMM about whether this was something of a ‘watering down’ of proposals from mandation to ‘encouragement’, I sensed from Prior that if these measures can be taken up by the industry, shown to be working and successful within a very short timescale, then there would be no qualms in encouraging Ministers to move further in terms of making their use compulsory. 

And for those who might think such matters will be left to be played out over a number of years, this appears to be far from the truth. 

Prior suggested that such measures would be viewed over a six-month pilot and having collated the results and (hopefully) the improvements within the process, it would be at this point that they might look to secure legislative support for making them mandatory. He added that by this time next year they will be completely clear about whether they have ideas that work.

So, in that sense, the clock is really ticking and again for those that might think, “We’ve been here before and nothing really changed”, well I think they might be underestimating the political will and backing behind this. 

Let’s not forget that – as Prior himself pointed out – improving the home buying process is pretty ‘apolitical’ in that few (if any) politicians are going to think it’s a bad idea. 

Plus, the government is a minority one and has to choose its battles wisely – one that does provide a degree of cross-party support is bound to be appealing. 

It also wants to go to the next election being able to say that it has deliver on its promise to improve matters and (importantly) it wants to be able to say it has helped younger people get on the ladder.

We, as an Association, have said recently that this feels like a pivotal moment for our industry – if anything the call for evidence response has solidified this feeling even more. 

It means we’ll be pushing our agenda even harder in the months to come, and working with our firms in these key areas to show good practise and to get the changes we want to see. 

I suspect that the agency market will be doing the same. If not, then why not?

*Eddie Goldsmith is Chairman of the Conveyancing Association (CA)