In its second intervention in the housing industry in a fortnight, the Government yesterday (SUNDAY 8 APRIL) announced measures to “professionalise” house buying.
Under new rules, sales agents (as well as letting agents) will be required to hold a professional qualification and to be transparent about any fees they receive for referring clients to solicitors, surveyors and mortgage brokers.
Sales agents will also be required to set a time line for local authority searches so buyers get the information they need within 10 days rather than weeks.
Voluntary reservation agreements will be encouraged to reduce the incidence of gazumping and prevent sales falling through.
The Government’s report points out that the average time from offer to completion in England and Wales currently stands at 8 to 12 weeks, with around 40% of buyers and sellers finding their property purchase took longer than expected.
“We know that the longer the process takes between offer and completion, the more opportunity there is for buyers and sellers to get nervous,” the report says, “which can lead to people pulling out and in some cases, a whole chain of transactions collapsing.
“We believe that a quicker process would reduce stress for consumers, and also reduce the number of failed transactions. Making more use of digital technology and getting buyers and sellers to provide more information up front is key to speeding up completions.”
The new rules will also require managing agents and freeholders to provide up-to-date lease information for a set fee and to an agreed timetable, in order to “end the current situation where leaseholders are at the mercy of freeholders and their agents”.
In addition, the powers of the National Trading Standards Estate Agency Team will be strengthened so they can carry out more enforcement against agents who flout the rules.
Public information guides on “How to Buy” and “How to Sell”, to be developed and published by the Government, will ensure customers are better informed of the overall process and questions they should be asking.
The housing secretary Sajid Javid said: “Buying a home is one of the biggest purchases someone will make in their life, but for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.
“So we’re going to put the consumers back in the driving seat. We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.”
The government estimates that there are approximately 20,000 estate agent businesses across the country, and currently, anyone can practise as an estate agent.
According to its research, more than six out of 10 buyers and sellers have experienced stress, and around a quarter of sellers said they would use a different estate agent if they were to go through the process again.
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9th April 2018