Department for Business, Innovation and Skills
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New arrangements give home buyers and sellers a better deal
The Government is introducing extra protection for people buying and selling homes.
Consumer Minister Gareth Thomas laid an order in Parliament today (1 July) requiring all residential estate agents to belong to a redress scheme by 1st October.
Gareth Thomas said:
"People who experience problems with an estate agent will soon have access to a free, easy to use ombudsman. The scheme will be transparent, independent and fair. It will speedily resolve complaints and will have the power to award compensation."
New measures will also come into force in October 2008 that:
* give greater powers to the Office of Fair Trading to remove rogue estate agents from the market
* increase the investigatory powers of enforcement officers.
Gareth Thomas said:
"Buying or selling your home is a life changing decision. It can cause people real stress and worry. Our measures should take some of this worry away and drive out the rogues that give honest businesses a bad name."
Peter Bolton King, Chief Executive of the National Association of Estate Agents said:
"We welcome and support the fact that every agent will have to belong to a redress scheme. This will help to create a more level playing field and to raise standards to the benefit of consumers and honest businesses. We see this as an important step - after all buying a home is one of the biggest financial and emotional decisions we ever make."
Pula Houghton, Campaigns Policy Manager at Which? said:
"We've been campaigning for a compulsory complaints scheme for estate agents for the last five years, so we're delighted that the scheme is nearing fruition. We're looking for this to make a genuine difference to those people who suffer at the hands of shoddy estate agents."
Estate Agents who want more information on the redress requirements should contact the OFT or visit their website http://www.oft.gov.uk.
Notes to editors:
1. Research commissioned by the OFT in 2004 showed that 21% of sellers and 23% of buyers experience problems with estate agents.
2. The Estate Agents Act 1979 (EAA 79) as amended by the Consumers, Estate Agents and Redress Act 2007 (CEARA 07), enables the Secretary of State by Order, to require estate agents who engage in residential estate agency work to join an approved redress scheme dealing with complaints from buyers and sellers of residential property. Responsibility for approving one or more redress schemes lies with the Office of Fair Trading.
3. On 19 June the OFT approved an application from the Ombudsman for Estate Agents to run a redress scheme. The OFT is currently considering two other applications. Details of these applications are available on the OFT web-site.
4. Estate agents in England and Wales that market properties with Home Information Packs (HIPs) are already required to belong to approved redress schemes solely for the purposes of complaints about estate agents in relation to HIPs. This order goes further by covering all estate agents in the UK and all complaints about the buying and selling of residential property. It fulfils a long standing Government commitment to give all sellers and buyers (including potential sellers and buyers) of residential property access to independent redress.
5. In the first instance there will be a penalty charge of £1,000 for estate agents that don't comply with the requirement to join a redress scheme. The penalty charge is in addition to the ultimate sanction for non-membership - a prohibition order banning an estate agent from carrying out estate agency work.
6. The Government's estate agents measures were part of the Consumer, Estate Agents and Redress Act that received Royal Assent in July 2007.
7. The Department for Business Enterprise and Regulatory Reform helps UK business succeed in an increasingly competitive world. It promotes business growth and a strong enterprise economy, leads the better regulation agenda and champions free and fair markets. It is the shareholder in a number of Government-owned assets and it works to secure, clean and competitively priced energy supplies
