Government's 'reforms' will dilute consumer protection, say lawyers

In Scotland – where most house sales are handled by solicitors – there has been strong reaction to the news that the Property Misdescriptions Act is to be ditched and the Estate Agents Act amended to allow new entrants to operate in the industry outside the scope of the legislation.

Malcolm Cannon, CEO of the Edinburgh Solicitors Property Centre, said: “Any efforts to improve the process of buying and selling property must be welcomed. However, what has been outlined by the UK Government does raise issues.
 
“By removing the detailed consumer protection contained within the Property Misdescriptions Act and relying upon the principles-based approach of Consumer Protection from Unfair Trading Regulations, they are opening up the opportunity for confusion and ambiguity.

“In effect we are going from detailed and specific protection to the vague.
 
“We believe this drawback is compounded when combined with the introduction of intermediaries who can operate outside the obligations of the Estate Agents Act based on whether they provide personal advice or not.

“This is diluting protection for consumers, especially when you consider the confusion that does arise in relation to whether advice or information is being provided.
 
“We disagree about the lack of innovation in the market. Among the ESPC membership we have seen considerable innovation in terms of service level offered, fee structure and client relations.
 
“Despite these changes, ESPC’s position will continue to be that the best option for buyers and sellers is to use solicitor estate agents who operate under their profession standards, behavioural code and master guarantee.”

But Sarah Beeny, who operates the largest of the ‘passive intermediaries’, Tepilo, and who contributed to the BIS consultation on the changes, said: “This is an important step and can only be a good thing for sellers.

“If people want to use an estate agent that’s fine and they still can, but you can’t ignore that the internet is here and people want to do things in a different way.”

She added: “Good agents should have nothing to fear and should be happy that they can prove the value they add.”

Beeny said that the UK should look to the US where she claimed between 20% and 30% of property sales are made without agents.

However, in the States vendors may have more reason to try the private sales route, with realtor fees being typically 6%.