The Office of Fair Trading (OFT) has detailed the nature of its market study into the buying and selling of houses today.
It said the study will take a ‘comprehensive look’ at the market for home buying and selling services and will consider:
* competition on price and quality between service providers, principally estate agents;
* the prospects for entry by new business models, including Internet-based models;
* whether the existing regulatory framework provides the right balance between protecting consumers who are buying or selling a home and ensuring that the market remains open to competition and innovation;
* the relationships between estate agents and other service providers such as mortgage brokers, surveyors, solicitors and other professional advisors.
It said it follows two months of discussion with interested parties on the scope of the study.
Regulate Resi Now
Property Week has campaigned for better regulation of residential agents through its ‘Regulate Resi Now’ campaign. The BPF has also sought regulation of residential agents.
Heather Clayton, senior director of infrastructure at the OFT, said: 'With the economic downturn, we need to ensure that consumers receive a good service when buying or selling a home, from a market that is competitive, innovative and well-functioning.
'We have had constructive discussions on the scope of this study with interested parties from across central and devolved government, consumer groups and the industry. This means we are starting the study with a clear understanding of the key issues.'
In January a Department for Business-sponsored report called for greater strengthening of regulations governing residential estate agents. Professor Colin Jones, at Heriot-Watt University, who wrote the report criticised current arrangements to protect consumers from rogue agents and landlords.
He said: ‘Voluntary accreditation/redress schemes of estate agencies and lettings agencies cover approximately two thirds and a half of their respective market in terms of numbers of agents. The Housing Ombudsman has a very small but significant part of the market.
'Independent redress is only available for the order of 4% at most of private tenants renting directly from landlords except with regard to deposits.’
The OFT study will cover the whole of the UK, ‘while recognizing the significant differences in how the market works in Scotland’.
The OFT said it intends to complete the study before the end of 2009. Further details, including the study's statement of scope are available at: http://www.oft.gov.uk/homes.