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Does the property industry need more regulation?

Q: Does the property industry need more regulation?

A: Over and above the emotional strain of selling, buying and renting, the experience of finding a new home is straight forward for most people.  If we’re selling, we hire an estate agent. If we’re buying or renting, we use an agent to help us find our new home.  But what happens when everything doesn’t go to plan – when sellers believe estate agents have not acted appropriately, or renters feel exploited by their letting agent?  Every year there are still hundreds of people who run into trouble with agents, which is where The Property Ombudsman comes in.  Funded by the industry, but entirely independent, the ombudsman’s job is to resolve disputes between buyers, sellers, landlords or tenants and the estate agents they engage with.

Last year Property Ombudsman Christopher Hamer dealt with 587 complaints about sales agents and 7,641 about lettings agents – a 26 per cent increase on 2010.  In the sales sector, the majority of complaints refer to communication difficulties between the estate agent and the seller.  On the lettings side, they’re mainly about the way in which lettings agents handle complaints from landlords and tenants.  Mr Hamer says he investigates each claim methodically and can award compensation of up to £25,000 for aggravation, distress and/or inconvenience and quantifiable loss.

But can he do enough to resolve these issues? Mr Hamer says the numbers of complaints about letting agents have been steadily increasing over the past few years as tough economic times mean fewer people are selling and more are renting.  And this, in turn, has led to more letting agents setting up shop on the high street. Unfortunately, they’re not necessarily the right type of agent.

Of the more than 7,000 complaints made to him about letting agents, over 2,000 of those concerned letting agents that were not registered with the ombudsman, which meant he was unable to adjudicate – even when there was a clear problem.  It’s these difficulties and lack of redress which make him advocate more regulation, which he says should require letting agents to sign up to a code of practice and scheme for redress. This is already the law for sales agents. “The calls that I have been making for regulation are based on the fact that 40 per cent of letting agents are not affiliated to me or any of the trade associations so they are operating outside any set of standards,” said Mr Hamer.

And while those who warn against regulation do often make sense, when it comes to renters – who often feel the balance of power is weighted against them anyway – Mr Hamer might just have a valid point.

Sewell & Gardner are members of the Property Ombudsman Scheme and are proud to say that we have never had a complaint lodged against us with the scheme.  We feel strongly that our in-house dispute procedure can iron out any issues that are brought our way and we are always sympathetic to our customer’s viewpoint because they are the most important part of our business.

We have a ‘Customer Promise’ charter and this year 96% of our customers voted us ‘Highly recommended’ at the ESTA’s industry awards so we know that we are doing something right!