Whitehall’s determination to press through changes to the Estate Agents Act were underlined this week in a speech by government minister Michael Fallon in which he laid out the red carpet – but not the red tape – for new business models.
Business minister Fallon announced that there would be extra support and less bureaucracy for a variety of ‘challenger’ businesses.
Specifically singled out was the forthcoming amendment of the Estate Agents Act “to take out of its scope intermediaries such as private sale portals, which only advertise properties and provide a means for sellers and buyers to communicate with each other”.
Such ‘challengers’ to estate agents were among businesses described by Fallon – speaking at an entrepreneur event in Sheffield – in glowing terms.
He said: “These are innovative enterprises that do not follow established ways of business working, and which might be held back by burdensome bureaucracy.”
He went on: “Challenger businesses create wealth and jobs – we should champion them at every opportunity. They put new products on our shelves, innovate our service industry and create new markets using the latest technology.
“I don’t want these pioneers falling foul of outdated regulations.”
‘Challenger’ businesses will be able to access 22,000 business mentors, who form part of the Government’s £1.8m mentoring programme.
The new business models, particularly if they are run by women, will also have access to a £100,000 fund to help them find the ‘right mentor to help their business prosper’.
Fallon’s remarks are likely to infuriate those in the industry who are unhappy about how they, as traditional estate agents, will still have to toe the legal line while newcomers – which could include new models from the likes of Tesco, which launched mortgages this summer and has previously had a stab at estate agency – will not.
Yesterday on EAT, Property Ombudsman Christopher Hamer hit out at the speed with which the Government is pushing through its changes to the Estate Agents Act.
Among the many agents who have contacted EAT to express their views is Jonathan Hudson, of Hudsons Properties in London.
He said: “To allow non-industry experts to come into the market unregulated is potentially catastrophic.
“Why should agents who have abided by the rules all of a sudden be undermined by newcomers, whether they are a large institution like Tesco starting an estate agency arm, or sellers directly selling to one another?
“Professionalism should never be under-estimated. When you are dealing with something as significant as property, you should be protected as a consumer – or what is the point in the legislation in the first place?”
Hudson also warned of the potential for mis-selling properties, with buyers incurring unnecessary expense in mortgage arrangement and survey fees, before errors are picked up by their conveyancers.
The Residential Property Surveyors Association also expressed its serious concerns.
Chairman Alan Milstein said: “The Government’s decision to make businesses promoting private house sales exempt from the EAA could see thousands of home buyers committing to purchase properties without any statutory protection.
“This could lead to considerable confusion among home buyers, with many entering into a purchase, unaware that if any problems should arise, they will not be eligible for any form of redress.
“With the recent changes in mind, it has never been more important for home buyers to commission their own independent condition survey on any property they plan to purchase.
“If purchasing a property from a private seller, the intermediary that has been promoting the property will be under no legal obligation to ensure that the property details and specifics provided to the buyer are accurate.
“In effect, people could be led to believe a property is in good condition, only to find once they have purchased and moved into the property that in fact considerable works are required – a costly mistake, which could run into thousands.”
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Comments
I just dont get this worry about Private sales. You are actually saying all you do to be better than them is, "nothing" , just able to use rightmove? I bet there is not one leading agent posting on here against.
Get better or get a new job.
W... good example.#
dont go taking daily mail quotes to make your arguments. People are buying houses, believe or not.
People will also get ripped off by 'poor' ftb liars given 1/2 a chance as well.
i protect my vendors. the govt wants them to get ripped off but are to stupid to realise what they are promoting.
off topic but this needs to be reported
http://www.primelocation.com/uk-estate-agents/properties/a/PAGL/uk/y/sr/s/
Can everyone call them please
They are a private sales website, i actually told TDPG about 6 months ago, they have not removed them
www.my-sell.co.uk £49 to sell
@ Waste of time. Correct, most sensible post on this subject.
No name;
Your abundance of condescension also comes over loud and clear.
@W
Your lack of experience and understanding comes across very well indeed.
It’s not about getting your imaginary buyer to pay £105,000 its about getting them to part with all of the £100,000 they have.
Rich;
"might be losing £1000's in poor negotiating"
How does negotiation figure in the current market where only a select few buyers will be able to offer any more than the limit of their lending, and where the restricted lending is the main anchor weighing the market down?
If the lender wants a 25% deposit on a £100k flat to lend the buyer £75k, the buyer has the £25k in cash, and can therefore afford EXACTLY £100k, how do you negotiate £105k out of them?
No point in talking anymore about this nothing changes if the portals don't allow private listings. Private listing sites already exist and Tesco can open a private seller site if it wants. The only change would be if the portals let Tesco's advertise which they won't or if Tesco's wanted to take on the likes of Rightmove which it could do now but it doesn't want to. So there's no point to all this unless the government intends to force Rightmove and co to allow private listings - can they do that?
In my experience it seems that only stupid people use private sale sites.
You save money on fee's but might be losing £1000's in poor negotiating and poor marketing. (believe it or not rightmove ent all that good if your not under priced)
People love using agents because they know deep down we arent the criminals the media and mislead govt. think we are.
Its hard enought walking into tesco and finding someone who knows where the toilet rolls are, never mind how much stamp duty is....
@ Mr A Vendor.
It doesn't bother me a hoot, how much my house is worth.
It bothers me that I have to pay over a years salary to pay the stamp duty.
It bothers me that the Government wants to introduce competition to drive down estate agency fees, to increase the No of people moving, yet at the same time, take much much more in an antiquated tax - for nothing.
“These are innovative enterprises that do not follow established ways of business working, and which might be held back by burdensome bureaucracy.”
We have been held back by this burdensome bureaucracy for years so why should those others who do the same us us EA's be exempt? Better still wipe out this burdensome bureaucracy for everyone. We can also 'not follow established ways of working' and I can name a couple or more in my town who step aside from good practice and use bully boy tactics which are in my opinion dangerous and downright dishonest.
I do not want to be part of 'the Government’s £1.8m mentoring programme' as they have not a clue as to what us EA's actually do so they what qualifications do they have to point the mentors in the right direction?
Buying and selling a property is a serious business, and something most people only do a handful of times in their lives. If an Estate Agents can provide exceptional service and be seen to be providing value for money in achieving a better price than self negotiation, Agents should have nothing to fear from these proposed bandits who will have very little to offer. That said, OFT/BIS meeting last week showed that this matter is a charter for lawyers...
Unfortunately this legislation is now in place so there is no point moaning about it. The "intermediaries" can do no more than introduce people to properties so it is up to us as estate agents to market our expert knowledge and negotiating skills. It never ceases to amaze me that we NEVER promote one of the most important things we do which is NEGOTIATING. It is our professional expertise and people management skills which keep sales together. Every buyer and seller knows how difficult it is between sale agreed and exchange of contracts. Let's use that to our advantage.
Richard Copus
I am sorry i dont see asset appreciation as earnt
You gained it for nothing you lose it for nothing!
You are asset rich which has lot to do with timing and little to do with hard graft.
I agree with you sentiment re tranasctions and tax.
But the tax that need to come down is income tax and VAT
Now would you be happy to see this at the expense of the value of your asset? I.e. if transactions went up but the value of your home fell to £600K would that be acceptable?
I am moving at the moment. I am selling for a lot more than I am buying for, just to pay the costs of moving.
Of those costs for moving, £35000 is Government charges to move. Stamp duty, land registry etc etc.
The far smaller part of the fee is the estate agents cost, solicitors, survey etc. The Estate Agents fee is insignificant compared to what the Government are stealing.
That is £35000 to the Government, from someone making £30,000 pa. So the Government want more than a year’s salary from me, because, I have had the audacity build myself up to a house of value approaching 1m.
This isn't taxing the rich, it's taxing the below average.
It is disgusting.
If they are serious about stimulating the economy, they will reduce stamp duty back to 1% across the board. In general taxes need to come down. It is common sense. There is a direct correlation between stamp duty rates rising under Labour and Gordon Brown and the no’s of house transactions falling. To their current embarrassing level.
The Country needs the number of transactions to rise, to stimulate the associated trades and retailers. Still, no point going on about it, it will never happen, the left wingers and Liberals, would never want to benefit the elite.
The thing is, earning around the average UK salary, but living in a £900k ish house, am I in the elite or the middle?
Prostitution is, im told the oldest profession in the world, well I think the ability for mankind to pay for a bunk up probably is but estate agency has been going a while too.
There are various ways of doing it, from your house on your own, via online adverts or working with a team from a commercial unit, all of which requires spending a lot of time looking for new customers, some of which will be people you don’t want to work with and others appreciate paying a bit more to get good service from professional caring people, you have to pick your target market and allow for the fact that some punters consider you all the same and go for the cheapest and take the risk that comes with that.
The problem is that there is a limited number of ways of doing the job, whichever route you take the aim is to bring brass and punter together for sex and in thousands of years this hasn’t changed – punter wants sex, prostitute wants money for doing it.
Same with EA, bringing buyer and seller together and keeping the relationship between them solid and workable until completion – sellers wont change because of regulation, they want to sell, buyers wont change either, they want to buy but there is a limited number of ways this can be achieved and im not sure that after many years of huge growth and wealth in the property business we haven’t got them all already?
Jonnie
'“In effect, people could be led to believe a property is in good condition, only to find once they have purchased and moved into the property that in fact considerable works are required – a costly mistake, which could run into thousands.”'
So, no different to buying through an Estate Agent then. Agents specifically deny responsibility for the condition of the property. Despite their 'expertise', no responsibility whatsoever is taken in this area.
Sounds as if the government is desperate to do anything to try to help the housing market get moving. And if they can reduce the amount it costs to move - by getting people to use cheaper 'agents' - you guys on going to be sacrificed on the altar of more transactions.