Government review is backed by property industry

Wednesday, 21 January 2009 2:56 PM

The final report of the Government Review of Regulation and Redress in the UK Housing Market published yesterday has been welcomed across the property industry.

The report has added weight to the British Property Federation's (BPF) long-standing campaign for the regulation of letting agents, and the Association of Mortgage Intermediaries (AMI) has welcomed the steps taken by the government to restore liquidity in the mortgage market.

The report was written for the Department for Business Enterprise and Regulatory Reform (BERR) by Professor Colin Jones, at Heriot-Watt University, and looks at problems across the housing sector which are damaging consumer confidence.

Ian Fletcher, BPF's residential director, said: "We're pleased that the government is making moves to protect consumers and help the industry become more professional and more responsible. Allowing rogue operators damages consumer confidence and undermines the positive work undertaken by the many professional players in the market.

"This report is a useful summary of redress in the sector and generally a good indicator of the direction of travel the policy is developing on several issues. The overarching themes of simplification and ensuring consistency are ones that I am sure will be supported across the sector."

Peter Bolton King, chief executive of the National Association of Estate Agents, agreed with Mr Fletcher.

He said: "For years, the National Association of Estate Agents has been calling for an appropriate level of regulation to be introduced as mandatory in the UK housing market.

"The sums of money are too large and the potential impact on families too great for the industry to remain liable to abuse by unqualified cowboys.

"Professor Jones recognises that estate agents should be better regulated to ensure that every branch has suitably qualified employees. This is a welcome step, and we look forward to the government's response to the report's suggestions."

The AMI has said that they hope the move to support mortgage-backed securities, outlined in the report, will restore much needed confidence to the market.

Chris Cummings, director general of AMI, said: "The government is taking the right steps to restart the mortgage market and we hope that this will provide banks with the confidence to begin lending. This will in turn help consumers to access better mortgage deals than they can access at the moment.

"The move to support investor confidence in mortgage-backed securities, together with the wider package of measures from government, demonstrates a coordinated approach to increase new lending levels.

"However if only the largest of banks will have access to the scheme - those institutions with £25billion or more in assets, then this will exclude all small lenders in the mortgage market. We have some concerns that the unintended consequence of this could be greater consolidation in the mortgage market. This would not be in the best interests of the industry or consumers themselves.

"We first called for government backed mortgage securities in April 2008 when we published our 'Fixing the Crunch White Paper'. We are pleased that our proposals have been taken forward."

The review was also well received by Ombudsman for Estate Agents, Christopher Hamer. He said: "I would add my support to Prof. Jones recommendation that the provisions of the Consumers, Estate Agents and Redress Act 2007 should be extended to lettings and management agents."

"I have seen the number of lettings firms joining my scheme increase significantly. It is clear that more people are now either tenants or landlords than previously and a development of the legislation will mean that everyone who either buys, sells, rents or is the landlord of a property in the UK would have access to independent redress if something goes wrong.

"The Act has clearly brought a major benefit to consumers in the residential sales sector and people in the ever expanding lettings market have the right to expect the same access to redress.

"Prof. Jones also calls for estate agents to carry professional indemnity insurance and to follow a code of practice. Of course every UK member of the OEA has that cover and is following the standards laid down in the OEA's Code of Practice. The Sales Code has received independent accreditation from the Office of Fair Trading and we are working towards this for the Lettings Code, too.

"I will be looking in detail at Prof. Jones's recommendations regarding redress and regulation but I am sure that this report will now add to the debate already under way and to which OEA board chairman Bill McClintock made a major contribution last week when he proposed a system of compulsory registration for all individuals involved in the process of residential property sales."

Royal Institute of Chartered Surveyors (Rics), director of regulation, Steven Gould, added: "Rics welcomes Professor Jones' conclusions, which have a lot in common with the recommendations put forward by Sir Bryan Carsberg last year.

"Given that two independent experts have now reported on the residential property market, with broad agreement from both industry and consumers on what needs to be done, we hope that the government will act quickly to introduce change and effective regulation to this market, which will be in the interest of consumers."

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