The Office of Fair Trading has backed a new code of practice for estate agents introduced by the Ombudsman for Estate Agents Company (OEA). Members of the OEA will be required to sign up to the code, which aims at offering consumers better protection and a higher level of service.
The introduction of such a code of practice which provides protection for consumers is, without doubt, a positive development in the house buying process. Indeed, there is a lot at stake for consumers. Buying a house involves a huge financial commitment - the biggest of their lives for the majority of consumers. Any measures that aim to ensure a fair treatment of buyers and sellers in various stages of the house buying and selling processes are more than welcome.
The move comes as an undercover investigation by the BBC revealed various flaws in industry practices by some estate agents. The program revealed that some agents were overvaluing properties, lying to clients about false offers and were prepared to sell properties well under their market value, if offered a generous fee.
While the introduction of the OEA's code of practice is a positive step to restricting such abhorrent behavior, the fact remains that the code does not apply to all estate agencies, only members of the OEA, which currently make up around 40% of the market. Given the importance of estate agents in the house buying process, this is simply not enough, particularly given that estate agents may play a more significant role in the mortgage market in the future.
The estate agent will potentially become more of an active player in the mortgage distribution market as a result of the forthcoming introduction of Home Information Packs, or HIPs. Some estate agents may choose to exploit the opportunities that may become available through providing HIPs to carve out a greater role as intermediaries in the mortgage market. Should this occur, the need for a comprehensive regulatory framework for the profession will become more pressing still. 'End Intelliext
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