The government is cracking down on the practice of gazumping and introducing new measures that aim to professionalise the estate agency industry.
Estate agents will be required to hold a professional qualification and be transparent about fees for referrals to solicitors, surveyors and mortgage brokers.
The changes will also encourage the use of voluntary reservation agreements in order to stop sales from falling through and limit the practice of gazumping, where sellers accept higher offers following an agreement to sell.
The government said the moves will professionalise the sector and create a more trustworthy and reliable industry.
Other measures will include setting a timeline for local authority searches, so buyers receive information within a set time period.
Freeholders will also be forced to provide up-to-date lease information for a fee and an agreed timetable, and the government will strengthen the National Trading Standards estate agency team.
It is also planning to increase efficiency in home buying with plans to introduce digital improvements such as electronic conveyancing.
Research carried out by the government found that more than six in 10 people who bought or sold property have experienced stress because of delays in the property transaction process.
The measures follow a ban on letting agency fees, which is due to start next year.
Housing secretary Sajid Javid said: “Buying a home is one of the biggest and most important 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.”
More extreme proposals, such as creating financial penalties for buyers who pull out of purchases and cause chains to collapse, are not included in the new plans.
Russell Quirk, chief executive of online estate agency Emoov, said: “This is really great news. The industry and government have talked to a long time to clean up house buying. If you add both speed and certainty to the process, there will be fewer transactions falling through, less wasted money, and less stress for the consumer.”
It is unclear what kind of qualification the government will mandate, and it will hold another consultation to work out how estate agents can be brought up to standard like conveyancers, solicitors and surveyors.
Becky Fatemi, managing director of London estate agency Rokstone, stated: “Rogue agents are small in number, but sadly the unprofessional behaviour of ‘wide boys’ gives the industry a bad reputation.”
DealMakerz thinks the new measures are welcome, as it will bring estate agents in line with other professionals involved in the house buying process, such as financial advisers.
The regulations should result in fewer house purchases falling through and help to improve the industry’s reputation, which has been marred by an unscrupulous few.
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