Carsberg review recommends industry overhaul

Monday, 16 June 2008 12:00 AM

A review of residential property carried out by Sir Bryan Carsberg has called for a radical overhaul of the administration and regulation of the market in England and Wales.

Initiated by the Royal Institution of Chartered Surveyors (Rics) in July 2007, along with the National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (ARLA), the review was designed to carefully examine private residential property in England and Wales.

Reporting today, the eponymous document finds there is a "lack of clear, consistent understanding" on the part of consumers in the market, as well as "patchy, badly understood and, in parts, unnecessary burden of red tape for those offering property services".

In response Sir Bryan - who has formerly served as the director general of Oftel and the Office of Fair Trading (OFT) - makes a number of recommendations to improve service in the market.

Key among these suggestions is the establishment of a new body to administer an evolved regulatory regime in the market.

This new organisation would have the responsibility for a host of new powers - including improving transparency in residential transactions and providing a standard draft contract to be provided by sellers to prospective buyers.

Proposals also include the licensing of estate agents.

Under the 1979 Estate Agency Act any individual can establish such a business, with the OFT having the power to bar them should they commit an offence - so called negative licensing.

Sir Bryan suggests agents should have to pass a basic test in order to be able to enter the market - one of 30 recommendations made.

The report also argues home information packs (Hips) should be replaced with a voluntary scheme.

Responding to the review, Rics director of external affairs, Gillian Charlesworth, commented: "Sir Bryan's review highlights a number of key areas where the current approach is clearly failing.

"The processes for regulation and redress do not go far enough to protect the consumer and we agree that participation in regulatory and redress schemes needs to be both consistent and universal.

"They should include all estate agents, letting agents, managing agents and landlords."

Key to the proposals outlined in the review is a desire for legislators and regulators to follow three basic principles when formulating proposals for the residential property field:

• Simple, transparent information for clients and customers is a primary objective.

• Proportionate control over the service provider rather than the service should encourage and allow innovation.

• Consistent enforcement and redress should underpin all schemes.

"Sir Brian's insights into consumer behaviour, and particularly the lack of knowledge that many buyers and sellers have of the workings of the property buying process and the roles of the individuals within them, is a strong wake up call to the sector," added NAEA chief executive, Peter Bolton King.

"We will be working very closely with our members over the coming months to look at ways in which we can better communicate with the general public in explaining exactly what estate agents do and what buyers and sellers should expect from our members."

The full Carsberg report can be found here.

Chris O'Toole

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