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The Consumers, Estate Agents and Redress Bill is designed to protect buyers and sellers and will make UK agents far more accountable for their practices.

According to proposals announced by Trade & Industry Secretary Alistair Darling, new measures under this Bill would: make it compulsory for all estate agents to belong to an independent, approved ombudsman with powers to award compensation to buyers or sellers; ensure agents refusing to join the scheme would be banned from operating; require estate agents to keep written records of dealings with buyers and sellers for six years, to be inspected without notice; and give greater powers to the Office of Fair Trading to remove rogue estate agents from the market.

Commenting on the proposals, Alistair Darling said: "All people want is a straight deal. The vast majority of estate agents give that. We want to get rid of those that don't. They give their industry a bad name.

“These proposals put power back in the hands of the buyer and seller. A compulsory ombudsman scheme able to award compensation, an obligation to keep thorough written records and new powers for the OFT to strike off the rogues who don't join, will drive up standards."

The new Bill will also protect vulnerable consumers from rogue traders and ‘doorstep selling’ by giving people the same seven-day cancellation and cooling-off rights for solicited visits as they currently have for unsolicited visits.

An industry solution
With only a third of estate agents currently signed up to the voluntary Ombudsman for Estate Agents scheme, it is hoped that this move will establish a better system of redress and protect the nation’s consumers.

The National Association of Estate Agents (NAEA) has welcomed plans to bring forward legislation to provide ‘improved arrangements for consumer advocacy and for the regulation of estate agents’, but warned that after-the-event compensation is not enough on its own and that prevention methods must be considered.

Charles Smailes, President of the NAEA, said: “This is clearly a step in the right direction. It is important for consumers to feel secure in the fact that they will receive some form of compensation if they are unfortunate enough to suffer at the hands of malpractice.

“What is equally important, however, is to do everything possible to stop the malpractice happening in the first place. Agents who are members of an industry body, such as the NAEA or the OEA for example, are bound by a Code of Conduct. We would like to see the Government make it compulsory for all agents to be a member of a regulatory body. What we hope is that today’s proposed legislation is the first step towards improved regulation of the industry and we would be pleased to work closely with the Government to take this forward.”

No substitute for direct regulation
Focusing on ethical practice as much as illegal acts, the UK government has struggled to find a solution to the main issues raised by consumers – namely gazumping, gazundering, aggressive selling, pretending that there are no buyers to drive a price down or more buyers than there really are to drive the price up.

Many believe that, until direct regulation is introduced, abuses will still occur in UK real estate and self-regulatory bodies have not done enough to prevent it. Relating this to the overseas property industry, Jag Sodhi of Fidentia said that self–regulatory bodies may be trying to achieve the same high standards of professionalism and protection to consumers that are available in the UK financial services industry, but they "still allow the more unprofessional companies that rely on pressure selling and immoral sales tactics to opt out of membership". He concluded by saying that only State intervention can create a truly level playing field and protect the consumer because " no self-regulatory body is likely to have the teeth and authority to deal with offenders, like the government watchdogs can".

Some commentators believe that it is the vagueness of the law which allows rogue traders to abuse the system and thus create a false perception of the industry as a whole.

Writing in The Sunday Times recently, Alan Cooke - chief executive of the Irish Auctioneers & Valuers Institute (IAVI) – commented on proposals to form the National Property Services Regulatory Authority in Ireland. This new Authority would create a workable and centralised licensing system under which all licence-holders will have a unique registration number that they must use in all advertisements, brochures and signage.